Yazıcılar Holding Anonim Şirketi and Its Subsidiaries

Yazıcılar Holding Anonim Şirketi

and Its Subsidiaries

Consolidated Interim Financial Statements and Explanatory Notes

As of March 31, 2005

YAZICILAR HOLDİNG ANONİM ŞİRKETİ Table of Contents

Pages

Consolidated Balance Sheet 3 - 4

Consolidated Income Statement 5

Consolidated Statement of Changes in Equity 6

Consolidated cash Flow Statement 7

Notes to Consolidated Financial Statements 8 - 61

Yazıcılar Holding Anonim Şirketi and Its Subsidiaries Consolidated Balance Sheet As at March 31, 2005 (Currency – Unless otherwise stated New Turkish Lira (YTL))

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Unaudited Audited Notes March 31, 2005 December 31,

2004 ASSETS Current Assets 1.371.878.706 1.327.037.329 Cash and Cash Equivalents 4 146.187.362 200.323.485 Marketable Securities (net) 5 340.817.149 323.923.972 Reserve Deposits at Central Bank 44.1 52.531.000 52.751.000 Banking Loans (net) 44.2 621.645.830 570.993.000 Trade Receivables (net) 7.1 39.073.366 33.183.775 Lease Receivables (net) 8.1 43.889.050 42.738.041 Derivative Financial Instruments – assets 976.000 1.006.000 Due From Related Parties (net) 9.1 12.729.500 8.720.337 Other Receivables (net) 10.1 26.464.620 21.623.333 Biological Assets (net) - - Inventories (net) 12 78.545.104 65.014.550 Receivables from Continuing Construction Contracts (net) - - Deferred Tax Assets - - Other Current Assets 15.1 9.019.725 6.759.836 Non-Current Assets 733.573.064 721.356.931 Trade Receivables (net) - - Lease Receivables (net) 8.1 24.908.000 25.484.000 Due from Related Parties (net) - - Other Receivables (net) - - Investments (net) 16 554.521.682 544.913.881 Positive/Negative Goodwill (net) 17 35.344.256 35.344.256 Investment Property (net) - - Property, Plant and Equipment (net) 19 61.270.122 61.035.160 Intangible Assets (net) 20 10.987.246 12.282.024 Deferred Tax Assets 14 36.247.220 37.801.309 Other Non-Current Assets 15.2 10.294.538 4.496.301 TOTAL ASSETS 2.105.451.770 2.048.394.260

Yazıcılar Holding Anonim Şirketi and Its Subsidiaries Consolidated Balance Sheet As at March 31, 2005 (Currency – Unless otherwise stated New Turkish Lira (YTL))

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Unaudited Audited Notes March 31, 2005 December 31,

2004 LIABILITIES Current Liabilities 1.215.722.715 1.184.149.993 Short-Term Borrowings (net) 6 49.448.490 35.235.434 Current Portion of Long-Term Borrowings (net) 6 347.641 7.135.076 Lease Obligations (net) 8.2 3.369.043 3.502.057 Other Financial Liabilities (net) - - Trade Payables (net) 7.2 44.714.044 47.843.353 Banking Customer Deposits 44.3 720.422.213 713.993.042 Funds Borrowed 44.4 280.715.732 271.205.357 Blocked Accounts 32.180.000 16.112.000 Due to Related Parties (net) 9.2 38.116.302 36.007.632 Advances Received 21 3.253.884 1.013.664 Deferred Income from Continuing Construction Contracts (net) - - Provisions 2.582.542 3.884.428 Derivative Financial Instruments – liabilities 2.237.000 1.878.000 Deferred Tax Liability - - Other Liabilities (net) 15.3 38.335.824 46.339.950 Non-Current Liabilities 21.404.419 21.045.897 Long-Term Borrowings (net) 6 347.641 680.825 Lease Obligations (net) 8.2 5.709.775 6.199.584 Other Financial Liabilities (net) - - Trade Payables (net) 7.2 840.320 720.300 Funds Borrowed - - Blocked Accounts - - Due to Related Parties (net) - - Advances Received - - Provisions 23 11.946.755 10.879.892 Deferred Tax Liability 14 2.439.995 2.542.639 Other Liabilities (net) 119.933 22.657 MINORITY INTEREST 152.983.246 147.404.389 EQUITY 715.341.390 695.793.981 Capital 1, 25 20.475.019 20.475.019 Capital Subsidiaries Elimination - - Capital Reserves 291.063.698 290.613.801 Share Premium 26 26.326.920 25.197.310 Income on Stock Disposals - - Revaluation Fund - - Financial Assets Value Increment Fund - - Adjustment to Equity 264.736.778 265.416.491 Profit Reserves 142.954.456 139.796.491 Legal Reserves 27 22.043.960 21.361.997 Statutory Reserves 27 8.000 8.000 Extraordinary Reserves 27 159.143.591 159.267.591 Special Reserves 27 1.153.827 5.000 Gain on Sale of Investment and Property, Plant and Equipment to be Transferred to Capital

-

-

Currency Translation Difference (39.394.922) (40.846.097) Net Income 17.024.514 134.881.534 Accumulated Profits 28 243.823.703 110.027.136 TOTAL LIABILITIES AND EQUITY 2.105.451.770 2.048.394.260

The explanatory notes are integral part of consolidated financial statements.

Yazıcılar Holding Anonim Şirketi and Its Subsidiaries Consolidated Income Statement For the Three Month Period Ended March 31, 2005 (Currency – Unless Otherwise Stated New Turkish Lira (YTL))

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Unreviewed Reviewed Notes March 31, 2005 March 31, 2004 NET SALES Sales (net) 36 129.238.198 78.710.499 Cost of Sales (-) (94.441.830) (52.635.698) Interest Income (net) 36 28.291.575 4.433.952 Service Income (net) - - Other Income from Operations (net) - - GROSS PROFIT 63.087.943 30.508.753 Operating Expenses (-) 37 (41.979.458) (27.897.799) PROFIT FROM OPERATIONS 21.108.485 2.610.954 Other Income 38.1 9.020.384 35.733.990 Other Expenses (-) 38.2 (416.283) (239.049) Financial Expenses (-) 39 (9.462.925) (5.803.817) Income from Participations 16.2, 16.3 7.355.969 10.023.682 OPERATING INCOME 27.605.630 42.325.760 Monetary Gain 40 - 16.344.770 Minority Interest (5.159.631) (10.049.020) INCOME BEFORE TAX 22.445.999 48.621.510 Taxes 14, 41 (5.421.485) (6.744.161) NET INCOME 17.024.514 41.877.349 Earnings Per Share (full YTL) 0,00083 0,0031

The explanatory notes are integral part of consolidated financial statements.

Yazıcılar Holding Anonim Şirketi and Its Subsidiaries Consolidated Statement of Changes in Equity For the Three Months Period Ended March 31, 2005 (Currency – Unless Otherwise Stated New Turkisk Lira (YTL))

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Issued Capital Adjustment to Equity Share Premium

Legal, Statutory, Special and

Extraordinary Reserves

Currency Translation Difference Net Income

Accumulated Profits Total

Balance at December 31, 2004 20.475.019 265.416.491 25.197.310 180.642.588 (40.846.097) 134.881.534 110.027.136 695.793.981Transfer of Net Income to Accumulated

Profits

- - - -

- (134.881.534) 134.881.534 -Increase in Share Premium - - 1.129.610 - - - - 1.129.610Other - (679.713) - 557.963 - - (1.084.967) (1.206.717)Securities Value Increase Fund - - - 1.148.827 - - - 1.148.827Currency Translation Difference - - - - 1.451.175 - - 1.451.175Net Income - - - - - 17.024.514 - 17.024.514 Balance at March 31, 2005 20.475.019 264.736.778 26.326.920 182.349.378 (39.394.922) 17.024.514 243.823.703 715.341.390

Issued Capital Adjustment to Equity Treasury Shares Share Premium

Currency Translation Difference

Net Income

Legal, Extarordinary Reserves and

Accumulated Profits TotalBalance at January 1, 2004 13.650.013 66.781.474 (4.272.104) 9.523.526 (25.092.75 - 470.210.081 530.800.232Increase in Share Premium - - - - (628.873) - - (628.873)Reclassification from Treasury Shares - - (1.509.242) 1.509.242 - - - -Sale of Treasury Shares - - 990.707 8.006.386 - - - 8.997.093Currency Translation Difference - - - - (11.903.422) - - (11,903,422)Net Income - - - - - 39.178.557 - 39.178.476 Balance at March 31, 2004 13.650.013 66.781.474 (4.790.639) 19.030.154 (37.625.053) 39.178.557 470.210.081 566.443.506

The explanatory notes are integral part of consolidated financial statements. .

Yazıcılar Holding Anonim Şirketi and Its Subsidiaries Consolidated Cash Flow Statement For the Three Months Ended March 31, 2005 (Currency – Unless Otherwise Stated New Turkish Lira (YTL))

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Notes Unreviewed Reviewed March 31, 2005 March 31, 2004 Cash flows from operating activities Net profit before minority interest, income tax and gain on monetary position

27.605.630 39.597.990

Adjustments for: Foreign exchange gain and losses (202.505) (4.471.593)Gain from disposal of tangible and intangible assets 252.744 (76.392)Depreciation and amortization (including goodwill) 4.651.248 6.964.060Provision for possible loan losses and impairment in receivables 3.649.000 7.651.000Provision for employee termination benfits 1.261.099 537.655Interest expense 8.252.514 58.742.209Gain on sale of shares in associates, joint ventures and other ınvestments - (731.631)Equity income of associates and joint ventures (7.355.970) (9.377.686)Other (1.692.421) - Operating profit before changes in operating assets and liabilities 36.421.339 98.835.612 Net (increase)/decrease in marketable securities (16.893.177) 142.107.514Net decrease in reserve deposits at Central Bank 220.000 2.538.134Net (increase) in banking loans (54.174.830) (86.105.027)Net (increase) in trade and other receivables and due from related parties (10.600.763) (13.297.442)Net decrease/(increase) in derivative financial instruments – assets 30.000 (41.793)Net (incerase)/decrease in inventories (13.530.554) 7.711.056Net changes in other assets (12.899.413) (39.591.625)Net (decrease)/increase in trade and other payables and due to related parties

(6.567.249) 25.061.644

Net increase/(decrease) in banking customer deposits 6.429.171 (114.871.796)Net incease in blocked accounts 16.068.000 6.357.566Net increase in derivative financial instruments – liabilities 359.000 554.516Retirement pay liability payment (194.196) -Taxes paid (5.271.926) - Net cash (used)/provided in operating activities (60.604.598) 29.258.359 Cash flows from investing activities Purchase of property,plant anf equipment (4.005.599) (3.680.660)Proceeds from sales of property, plant and equipment 161.421 231.742Proceeds from sale of investment - 4.218.000Payments to acqire minority interest - (1.622.115)Capital increase os subsidiaries from minority shareholders - 231.088 Net cash used in investing activities (3.844.178) (621.945) Cash flows from financing activities Dividends from equity participations - (37.851)Sale of treasury shares - (518.535)Repayments of fund borrowed (21.842.330) (31.619.923)Increase in share premium 719.873 10.396.633Addition to borrowings from banks and other institution 67.479.569 29.068.485Repayments of borrowings from banks and other institution (30.028.651) (9.702.181)Interest paid (7.466.972) (27.754.433) Net cash provided/(used) in financing activities 8.861.489 (30.167.805) Monetary gain/loss and currency translation on cash and cash transaction

1.451.175 23.032.281

Net decrease/increase in cash and cash equivalents (54.136.112) 21.500.890 Cash and cash equivalent at beginning of year 4 200.323.485 87.992.464 Cash and cash equivalent at the end of period 4 146.187.373 109.493.354

Yazıcılar Holding Anonim Şirketi and Its Subsidiaries Notes to Consolidated Financial Statements March 31, 2005 (Currency – Unless Otherwise Stated New Turkish Lira (YTL))

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1. CORPORATE INFORMATION General Yazıcılar Holding A.Ş., a company incorporated in İstanbul, Turkey (“Yazıcılar” or the “Company”) is a holding company of which majority shares are owned by Yazıcı Family. Certain shares of the Company are listed on the İstanbul Stock Exchange and Luxembourg Stock Exchange. The Company was incorporated in 1976. The registered office address of the Company is Ankara Asfaltı üzeri, PTT Hastanesi yanı, Umut Sok, İçerenköy, Kadıköy, İstanbul. The consolidated financial statements are authorized for issue by top management on June 17, 2005. Nature of Activities of the Group The Company and its subsidiaries are referred to as “the Group” for the purposes of the consolidated financial statements. The Group is organized and primarily managed in four principal groups: beverage (including beer and soft drink products), automotive (including passenger vehicles, commercial vehicles, generators and spare and component parts), financial services (including banking, leasing, brokerage, portfolio management in capital markets and consumer finance) and writing instruments and stationery. In addition, AEH has interests in a number of other sectors, including tourism, trade, information technologies and food. The average number of personnel of the Group is 1,756. (December 31, 2004: 1,461) List of Shareholders As of March 31, 2005 and December 31, 2004 the composition of shareholders and their respective percentage of ownership can be summarized as follows:

March 31, 2005 December 31, 2004 Paid-in Capital Paid-in

Capital Paid-in Capital %

Yazıcı Family 9,157,213 9,157,213 9,157,213 44.72 Kamil Yazıcı Yönetim ve Danışma A.Ş. 6,859,125 6,859,125 6,859,125 33.50 Publicly traded 4,458,682 4,458,682 4,458,682 21.78 Historical share capital 20,475,020 20,475,020 20,475,020 100.00


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List of Subsidiaries The subsidiaries included in consolidation and their shareholding percentages at March 31, 2005 and December 31, 2004 are as follows:

Place of Incorporation

Principal Activities

Effective Shareholding and Voting Rights %

March 31, 2005

December 31, 2004

Anadolu Endüstri Holding A.Ş. (AEH) Turkey Holding company 67.91 67.91 Alternatifbank A.Ş. (A-Bank) (*) Turkey Banking services 61.13 61.13 Alternatif Yatırım A.Ş. (A Yatırım) Turkey Brokerage company 61.13 61.13 Alternatif Finansal Kiralama A.Ş. (A-Lease) Turkey Leasing company 64.44 64.44 Alternatif Yatırım Ortaklığı A.Ş. (A-Yatırım Ortaklığı) (*) Turkey Investment company 2.47 2.47 Çelik Motor Ticaret A.Ş. (Çelik Motor) Turkey Import, distribution and marketing of

Lada and Kia motor vehicles 67.91 67.91

Anadolu Motor Üretim ve Pazarlama A.Ş. (Anadolu Motor)

Turkey Production of industrial engines 67.72 67.72

Anadolu Otomotiv Dış Ticaret ve Sanayi A.Ş. Turkey Import of Lada and Kia motor vehicles 67.27 67.27 Anadolu Elektronik Aletler Pazarlama ve Ticaret A.Ş. (Anadolu Elektronik)

Turkey Distrbution of Samsung-branded consumer durables in Turkey

34.54 -

Adel Kalemcilik Ticaret ve Sanayi A.Ş. (Adel) (*) (**) Turkey Production of writing instruments under Adel, Johann Faber and Faber Castell brand names

38.63 38.63

Ülkü Kırtasiye Ticaret ve Sanayi A.Ş. (Ülkü) (**) Turkey Distribution of the products of Adel, Bantex and other imported stationery products

49.70 49.70

Ana Gıda ve İhtiyaç Maddeleri Sanayi ve Ticaret A.Ş. (Ana Gıda)

Turkey Production and marketing of vegetable oils and tea

67.91 67.91

Efes Turizm İşletmeleri A.Ş. (Efestur) Turkey Arrangement of traveling and organization facilities of the Group

51.44 51.44

Anadolu Bilişim Hizmetleri A.Ş. (ABH) Turkey IT, internet and e-commerce services 64.85 64.85 Oyex Handels GmbH (Oyex) Germany Trading of various materials used in the

Group 67.23 67.23

AEH und Co. Germany Provides necessary market research of products abroad

67.23 67.23

(*) Shares of A-Bank, Adel and A-Yatırım Ortaklığı are currently traded on the İstanbul Stock Exchange. (**) AEH controls Adel and Ülkü through its shareholding of 56.89% and 68.78%, respectively. Moreover, Adel has 7.67% at Ülkü. As a

result, Adel and Ülkü are controlled by Yazıcılar. 2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS Basis of Preparation The Company and its subsidiaries in Turkey maintain their books of account and prepare their statutory financial statements in accordance with the principles of Capital markets Board of Turkey (“CMB”), Turkish Commercial Code, Tax Code, Banking Law and the Uniform Charts of Account issued by the Ministry of Finance. The foreign subsidiaries maintain their books of account and prepare their statutory financial statements in their local currencies and in accordance with the regulations of the countries in which they operate. According to a new law enacted on January 30, 2004, Yeni Türk Lirası (New Turkish Lira, YTL) and Yeni Kuruş (New Kuruş, YKr) are the new currency units of the Republic of Turkey (1YTL=100YKr). Based on CMB’s announcement, dated November 30, 2004, financial statements of the Company for the period ended March 31, 2005 are presented in YTL, including the figures for the previous period used for comparison purposes. Previous period’s financial statements are also presented in YTL, again due to comparison purpose.


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2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (continued) The financial statements of the Company and its subsidiaries have been prepared in accordance with accounting and reporting standards as prescribed by CMB (“CMB accounting standards”). CMB has issued Communiqué no: XI-25 “Communiqué on Accounting Standards in Capital Markets”, which sets out a comprehensive set of accounting principles. In this Communiqué, CMB stated that, application of accounting standards prescribed by the International Accounting Standards Board (IASB) and International Accounting Standards Committee (IASC) will be considered as an alternative compliant with CMB accounting standards. On March 17, 2005, CMB has issued a resolution and declared that application of inflation accounting is no longer required for companies operating in Turkey effective from January 1, 2005, as the high inflation period seems over under the current circumstances. The financial statements attached, are not inflation adjusted as of March 31, 2005; they are prepared with the alternative approach defined by CMB, as explained above, and presented using the compulsory formats prescribed by CMB in its announcement, dated December 20, 2004. Previous year’s financial statements are presented in the equivalent purchasing power of New Turkish Lira as of December 31, 2004, for comparison purpose. Index and conversion factors used in the restatement of consolidated income statement for three-month period ended March 31, 2004 in terms of the purchasing power of lira as of December 31, 2004, for comparison purpose are given below: Dates Index Conversion Factor December 31, 2004 8,403.8 1.00000 March 31, 2004 7,862.2 1.06889 The main guidelines for the above mentioned restatement are as follows: - Non-monetary items in the December 31, 2004 financial statements are restated in terms of the purchasing

power of lira at December 31, 2004; after that, no restatement is done. - Income statement for the January 1, 2005 and March 31, 2005 period is not restated. Previous year’s income

statement is expressed in terms of the purchasing power of lira at December 31, 2004.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES The principal accounting policies used in preparing the consolidated financial statements of the Group are as follows; Foreign Subsidiaries The foreign subsidiaries maintain their books of account and prepare their statutory financial statements in their local currencies and in accordance with the regulations of the countries in which they operate. The financial statements of foreign subsidiaries are used in consolidation after adjustments and certain reclassifications made for the purpose of fair presentation in accordance with IFRS. 2004 2003 Local

Currency Functional Currency

Functional Currency

Anadolu Endüstri Holding und Co. KG (AEH und Co.)

EUR EUR EUR

Oyex Handels GmbH (Oyex) EUR EUR EUR Foreign subsidiaries are established as foreign corporate entities. Basis of Consolidation The consolidated financial statements are comprised of the financial statements of the Company and its subsidiaries drawn up to March 31, 2005. Subsidiaries Subsidiaries are the companies in which the Group owns, either directly or indirectly, more than 50% of the voting rights of the share capital and is able to govern the financial and operating policies of the enterprise so as to benefit from its activities. Subsidiaries are consolidated on full consolidation basis. Intercompany balances and transactions, including intercompany profits and unrealized profits and losses are eliminated. Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. The Group has participated in Anadolu Elektronik A.Ş., established in January 2005; since then, Anadolu Elektronik A.Ş. is included in the consolidated results. The effective shareholding of the Group in Anadolu Elektronik A.Ş. is 34,54%. The purchase method of accounting is used for acquired businesses. Investment in Associates The Group’s investments in associates are accounted for under the equity method of accounting. Generally speaking, the Group holds 20 to 50% stake in associates or the Group has significant influence on their operations, despite the absence of a controlling stake. The investments in associates are carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associates, less any impairment in value. The income statement reflects the Group’s share of the results of operations of the associates. Unrealized profits from the intercompany transactions are restated with the Group’s total shareholding ratio in the associate, while unrealized losses are only restated if the transferred asset does not indicate value impairment.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) Investment in Joint Venture Investments in companies where the Group collectively has a joint control with unrelated parties are classified as “investment in joint ventures”. Investments in joint ventures are accounted for using the “proportionate consolidation principle;” i.e. the consolidation of the Group’s share in the joint venture’s assets, liabilities, and income and expenses. Related parties Shareholders, executive management, members of the board of directors, subsidiaries, associates and joint ventures are regarded as related parties with respect to the basis of presentation of consolidated financial statements. While important portion of transactions with related parties are eliminated, the uneliminated amounts are expressed in Note9. Cash and Cash Equivalents For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise cash on hand, balances with Central Bank, deposits with banks and other financial institutions and other money market placements with an original maturity of three months or less. The amounts paid under the reverse purchase agreements are included in the cash and cash equivalents. Investments All investments are initially recognized at cost, being the fair value of the consideration given and including acquisition charges associated with the investment. All regular way purchases and sales of financial assets are recognized on the settlement date i.e. the date the asset delivered to or by the Group. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the marketplace. Changes in fair value of assets to be received during the period between the trade date and the settlement date are accounted for in the same way as the acquired assets i.e. for assets carried at cost or amortized cost, change in value is not recognized; for assets classified as trading or as available for sale, the change in value is recognized to profit and loss, and in equity respectively. The Group maintains three separate securities portfolio, as follows: Trading securities Trading securities are securities, which were either acquired for generating a profit from short-term fluctuations in price or dealer’s margin, or are securities included in a portfolio in which a pattern of short-term profit taking exists. After initial recognition, trading securities are remeasured at fair value based on quoted bid prices. All related realized and unrealized gains or losses are recognized in trading income / (loss), net. Held- to- maturity securities Investment securities with fixed or determinable payments and fixed maturity where management has both the intent and the ability to hold to maturity are classified as held-to-maturity. Management determines the appropriate classification of its investments at the time of the purchase. Held-to-maturity investments are carried at amortized cost using the effective yield method, less any impairment in value. Amortized cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity. For investments carried at amortized cost, gains and losses are recognized in income when the


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investments are derecognized or impaired, as well as through the amortization process. Interest earned whilst holding held-to-maturity securities is reported as interest income. 3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) Available- for- sale securities All other investments are classified as available-for-sale; Available-for-sale securities are subsequently carried at fair value. Gains or losses on remeasurement to fair value are recognized as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in income. Interest earned on available-for-sale investments is reported as interest income. Dividends received are included in dividend income. For investments that are actively traded in organized financial markets, fair value is determined by reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet date. For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment. Equity securities for which fair values cannot be measured reliably are recognized at cost less impairment. Trade and Other Receivables Trade receivables are recognized at original invoice amount and carried at amortized cost less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. Originated Loans and Advances to Customers Loans originated by the Group by providing money directly to the borrower or to a sub-participation agent at draw down are categorized as loans originated by the Group and are carried at amortized cost. Third party expenses, such as legal fees, incurred in securing a loan are treated as part of the cost of the transaction. All loans and advances are recognized when cash is advanced to borrowers. Provisions for Possible Loan Losses and Lease Receivable Losses Based upon its evaluation of credits granted, management estimates the total credit risk provision that it believes is adequate to cover uncollectible amounts in the Group’s loan and receivable portfolio and losses under guarantees and commitments. If there is objective evidence that the Group will not be able to collect all amounts due (principle and interest) according to original contractual terms of the loan, such loans are considered impaired and classified as “loans in arrears”. The amount of the loss is measured as the difference between the loan’s carrying amount and the present value of expected future cash flows discounted at the loan’s original effective interest rate or as the difference between the carrying value of the loan and the fair value of collateral, if the loan is collateralized and foreclosure is probable. Impairment and uncollectibility are measured and recognized individually for loans and receivables that are individually significant, and on a portfolio basis for a group of similar loans and receivables that are not individually identified as impaired. The Group ceases to accrue interest on those loans that are classified as “loans in arrears” and for which the recoverable amount is determined primarily in reference to fair value of collateral.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) The carrying amount of the asset is reduced to its estimated recoverable amount through use of an allowance for impairment account. A write off is made when all or part of a loan is deemed uncollectable or in the case of debt forgiveness. Write offs are charged against previously established allowances and reduce the principle amount of a loan. Recoveries of loans written off in earlier periods are included in income. If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the provision is credited to the provision for loan losses expense. Unwinding of the discount is treated as income and remaining provision is then reassessed. Inventories Inventories are valued at the lower of cost and net realizable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows: Costs are accounted for weighted average method. Finished goods and work-in-progress - cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value. Land is not depreciated. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Land improvements 5-50 years Buildings 20-50 years Machinery and equipment 5-10 years Motor vehicles 5 years Furniture and fixtures 5 years Leasehold improvements Rent period The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount. The recoverable amount of property, plant and equipment is the greater of net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs, Impairment losses are recognized in the income statement.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) Intangible Assets Intangible assets acquired separately from a business are capitalized at cost. Intangible assets acquired as part of an acquisition of a business are capitalized separately from goodwill if the fair value can be measured reliably on initial recognition, subject to the constraint that, unless the asset has a readily ascertainable market value, the fair value is limited to an amount that does not create or increase any negative goodwill arising on the acquisition. Intangible assets, excluding development costs, created within the business are not capitalized and expenditure is charged against profits in the year in which it is incurred. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill Goodwill represents the excess of the cost of the acquisition over the fair value of identifiable net assets of a subsidiary, associate or joint venture at the date of acquisition. Goodwill that arose from the acquisitions before March 31, 2004 is amortized on a straight-line basis over 5 years. Goodwill is reviewed annually and adjusted for impairment where it is considered necessary. Starting from January 1, 2005, the Group has ceased amortizing the goodwill arising from business combinations before March 31, 2004, in accordance with IFRS 3. Amortization of goodwill method is not applied for any acquisitions after March 31, 2004. In line IFRS 3, at year-end 2005, the registered goodwill will be reviewed and adjusted for impairment. Repurchase and Resale Transactions The Group enters into short-term sales of securities under agreements to repurchase such securities. Such securities, which have been sold subject to a repurchase agreement, continue to be recognized in the balance sheet and are measured in accordance with the accounting policy of the relevant security portfolio which they are part of. The counterparty liability for amounts received under these agreements is included in other money market deposits. The difference between sale and repurchase price is treated as interest expense and accrued over the life of the repurchase agreements. Assets purchased with a corresponding commitment to resell at a specified future date (reverse repurchase agreements) are not recognized in the balance sheet, as the Group does not obtain control over the assets. Amounts paid under these agreements are included in other money market placements. The difference between purchase and resale price is treated as interest income and accrued over the life of the reverse repurchase agreement. Foreign Currency Denominated Transactions Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are taken to the income statement. Group Companies The assets and liabilities of foreign subsidiaries are translated at the rate of exchange ruling at the balance sheet date. The income statements of foreign subsidiaries are also translated at year-end exchange rates, which are considered as a proxy to restate such income statement amounts at year end purchasing power of YTL. Differences resulting from the deviation between the inflation rate and the appreciation of foreign currencies against the New


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Turkish Lira related to equity accounts of consolidated subsidiaries were taken to equity as currency translation differences. 3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) Recognition and Derecognition of Financial Instruments The Group recognizes a financial asset or financial liability in its balance sheet when and only when it becomes a party to the contractual provisions of the instrument. The Group derecognizes a financial asset or a portion of financial asset when and only when it loses control of the contractual rights that comprise the financial asset or a portion financial asset. The Group derecognizes a financial liability when and only when a liability is extinguished that is when the obligation specified in the contract is discharged, cancelled and expired Borrowings from Banks and Other Institutions, Deposits and Funds Borrowed All borrowings, deposits and funds borrowed are initially recognized at cost. After initial recognition, all interest bearing liabilities, are subsequently measured at amortized cost using the effective interest rate method, less amounts repaid. Amortized cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses are recognized in net profit or loss when the liabilities are derecognized or impaired as well as through the amortization process. Borrowing Costs Borrowing costs generally are expensed as incurred. Employee Termination Benefits a) Defined benefit plan In accordance with existing social legislation, the Group is required to make lump-sum termination indemnities to each employee who has completed one year of service with the Company and its Turkish subsidiaries and whose employment is terminated due to retirement or for reasons other than resignation or misconduct. In the consolidated financial statements, the Group have reflected a liability calculated using the Projected Unit Credit Method and based upon estimated inflation rates and factors derived using the Company and its Turkish subsidiaries’ experience of personnel terminating their services and being eligible to receive retirement pay and discounted by using the current market yield at the balance sheet date on government bonds. b) Defined contribution plan The Group pays contribution to the Social Security Institution of Turkey on a mandatory basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as interest expense. Leases The Group as Lessee Finance Lease Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Capitalized leased assets are depreciated over the estimated useful life of the asset. If there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term, the asset should be fully depreciated over the shorter of the lease term or its useful life. Operating Lease Leases where the lesser retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. These include rent agreements of premises, which are cancelable subject to a period of notice. Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term. The Group as Lessor Finance Lease The Group presents leased assets as a receivable equal to the net investment in the lease. Finance income is based on a pattern reflecting a constant periodic rate of return on the net investment outstanding. Initial direct costs are recognized immediately as expenses. Operating Lease The Group presents assets subject to operating leases in the balance sheets according to the nature of the asset. Lease income from operating leases is recognized in income on a straight- line basis over the lease term. The aggregate cost of incentives provided to lessees is recognized as a reduction of rental income over the lease term on a straight-line basis. Initial direct costs incurred specifically to earn revenues from an operating lease are recognized as an expense in the income statement in the period in which they are incurred.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) Income and Expense Recognition Non-Banking Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Sales are recognized net of sales taxes and discounts when delivery has taken place and transfer of risks and rewards has been completed. Revenue from rendering services is recognized by reference to the stage of completion when it can be measured reliably. Revenues and expenses are recognized on accrual basis. Banking Interest income and expenses are recognized in the income statement for all interest bearing instruments on an accrual basis using the effective yield method based on the actual purchase price. Interest income also includes coupons earned on fixed income securities and accrued discount and premium on treasury bills and other discounted instruments. Commission income, fee for various banking services and dividends are recorded as income when collected. Dividends are recognized when the shareholders’ right to receive the payments is established. Income Tax Tax expense / (income) is the aggregate amount included in the determination of net profit or loss for the period in respect of current and deferred tax. Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognized for all taxable temporary differences: • except where the deferred income tax liability arises from goodwill amortization or the initial recognition of

an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries, associates and

interests in joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax assets and unused tax losses can be utilized: • except where the deferred income tax asset relating to the deductible temporary difference arises from the

initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of deductible temporary differences associated with investments in subsidiaries, associates and

interests in joint ventures, deferred tax assets are only recognized to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Derivative Financial Instruments The Group enters into transactions with derivative instruments including forwards, swaps and options in the foreign exchange and capital markets. These derivative transactions are considered as effective economic hedges under the Group's risk management policies; however since they do not qualify for hedge accounting under the specific provisions of IAS 39, they are treated as derivatives held for trading. Derivative financial instruments are initially recognized in the balance sheet at cost and subsequently are remeasured at their fair value. Fair values are obtained from quoted market prices, to the extent publicly available, discounted cash flows and options pricing models as appropriate. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative. For derivatives that do not qualify for special hedge accounting, any gains or losses arising from changes in fair value are taken directly to net profit or loss for the period. Contingencies Contingent liabilities are not recognized in the financial statements; they are disclosed only if they do not bear high probability of an outflow of resources embodying economic benefits. Contingent assets are explained in the footnotes only in case of a highly-probable inflow of economic benefit. Segmental Information Since the Group’s risk and return ratios are influenced by the differences in the goods and services it produces, segmental information is provided on the basis of business segments in the first layer. Information in geographical segments is not reported as second layer since the Group’s operations do not bear any significance in terms of general presentation of financial statements and monetary significance for foreign country operations. The Group is organized into four major operating businesses. Financial information on business segments is presented in Note 33.


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4. CASH AND CASH EQUIVALENTS

March 31, 2005 December 31, 2004 Non-Banking 24.799.377 22.986.563 Banking 121.387.985 177.336.922 Cash and cash equivalents at consolidated cash flow statement 146.187.362 200.323.485

Non-Banking: The details of cash and cash equivalents are as follows:

March 31, 2005 December 31, 2004 Cash on hand 61.333 57.305 Cash in banks 24.738.044 22.929.258 24.799.377 22.986.563

YTL denominated time deposits are made for 1-120 days (31 December 2004: 3 and 77 days) periods and earn interest between 13.5%-19% (31 December 2004: 17.5%-24%). USD denominated time deposits are made for 1-32 days (31 December 2004: 10 and 31 days) periods and earn interest between 1%-4% (31 December 2004: 2%-4.25%). Eur denominated time deposits are made for 4-28 day periods and earn interest between 1%-3,5%. Banking March 31, 2005 December 31, 2004 Cash on hand 11.149.000 8.656.000Balances with the central bank 668.000 5.580.000 Cash and balances with the Central Bank 11.817.000 14.236.000 Deposits with banks and other financial institutions 88.080.985 143.254.922 Funds lent under reverse repurchase agreements 2.501.000 2.000.000Interbank placements 18.531.000 17.586.000Cheques given to collection 458.000 260.000 Other money market placements 21.490.000 19.846.000 Total 121.387.985 177.336.922


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4. CASH AND CASH EQUIVALENTS (continued) As of March 31, 2005 and December 31, 2004 the interest rate range of deposits and placements is as follows:

March 31, 2005 December 31, 2004 Amount Effective interest rate Amount Effective interest rate New

Turkish Lira

Foreign Currency

New Turkish

Lira

Foreign currency

New Turkish Lira

Foreign currency

New Turkish Lira

Foreign currency

Balances with the Central Bank 297.000 371.000 % 0 % 0 4.563.000 1.017.000 %14,5 -Deposits with banks and other financial institutions 64.228.669 23.852.316 % 16 % 2 109.991.165 33.263.757 %20,12 2,21%Funds lent under reverse repurchase agreements 2.501.000 - % 16 % 0 2.000.000 - %18 -Interbank placements 2.065.000 16.466.000 % 15 % 2 1.878.000 15.708.000 %18,28 1,05% Total 69.091.669 40.689.316 118.432.165 49.988.757

5. INVESTMENT IN SECURITIES

March 31, 2005 December 31, 2004 Non-Banking 30.794.149 37.654.972Banking 310.023.000 286.269.000 340.817.149 323.923.972

Non-Banking Maturities of debt instruments is between July 6, 2005 and October 5, 2005 (31 December 2004: January 26, 2005 and July 27, 2005) for YTL denominated instruments. Debt instruments earn between 24%-26% for YTL denominated instruments. Banking Trading Securities:

March 31, 2005 December 31, 2004

Amount Effective

interest rate %

Amount Effective

interest rate % Trading securities at fair value Debt instruments Turkish government bonds 44.479.000 %16 54.066.000 %24,14 Turkish treasury bills 125.000 %16 976.000 %24,14 Foreign currency government bonds - - - - Eurobonds issued by the Turkish government 48.000 %7 74.000 %10,01 Total 44.652.000 55.116.000 Others Equity securities – listed(*) 11.594.000 11.286.000 - Total 11.594.000 11.286.000 Total trading securities 56.246.000 66.402.000

(*) Equity securities include shares of the consolidated closed ended mutual fund amounting to YTL 2,620,000 (31 December 2004: YTL 2,417,000) that are actively traded.


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5. INVESTMENT IN SECURITIES (continued) Investment Securities:


Amount Effective

Interest rate

Amount Effective

Interest rate Available-for-sale securities at fair value Government bonds 1.195.000 %17 - - Treasury bills 27.945.000 %18 - - Eurobonds 27.000 %6 - - Total available-for-sale securities at fair value 29.167.000 - - Originated loans and advances to government at amortized cost: Debt Instruments Foreign currency indexed Turkish government bonds 224.610.000 %12 219.867.000 %12,24 Originated loans and advances to government 224.610.000 219.867.000 Total investment securities 253.777.000 219.867.000

Carrying value of debt instruments given as collateral under repurchase agreements are:

March 31, 2005 December 31, 2004 Trading securities 3.880.000 1.858.000 Held to maturity securities 104.626.000 118.738.000

As of March 31, 2005, the carrying value of government securities kept in the Central Bank of Turkish Republic (the Central Bank) and in İstanbul Stock Exchange Clearing and Custody Incorporation for legal requirements and as a guarantee for stock exchange and money market operations are YTL 112,672,000 (31 December 2004: YTL 114,053,000). 6. BORROWINGS

March 31, 2005 December 31, 2004 Bank borrowings 49.448.490 35.235.434 Current portion of long-term borrowings 347.641 7.135.076 Short term borrowings 49.796.131 42.370.510 Bank borrowings 347.641 680.825 Long term borrowings 347.641 680.825 Total borrowings 50.143.772 43.051.335


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6. BORROWINGS (continued) The effective interest rates at the balance sheet date were as follows:

March 31, 2005 December 31, 2004 Bank loans

Non current USD and EURO denominated borrowings %1,38 %1,38

Current USD and EURO denominated borrowings %1,38-%5,8 %1,38-%5,9 YTL denominated borrowings %15,22-%20,2 %23-%24

Repayments of long-term borrowings are scheduled as follows (excluding finance lease obligation): March 31, 2005 December 31, 2004 2005 - 7.135.076 2006 347.641 347.641 Thereafter 347.641 333.184 695.282 7.815.901 7. TRADE RECEIVABLES AND PAYABLES 7.1 TRADE RECEIVABLES Non-Banking

March 31, 2005 December 31, 2004 Trade receivable 24.225.138 20.317.157 Notes receivable and post-dated cheques 15.992.138 14.056.311 Provision for doubtful accounts (1.143.910) (1.189.693) 39.073.366 33,183,775

7.2 TRADE PAYABLES

March 31, 2005 December 31, 2004 Non-Banking 44.120.875 46.174.867 Banking 593.169 1.668.486 44.714.044 47.843.353

As of March 31, 2005, the carrying value of long term trade payables is YTL 840,320 (December 2004, 31: YTL 720,300).


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8. LEASE RECEIVABLES AND OBLIGATIONS 8.1 LEASE CONTRACTS RECEIVABLE Gross investment in finance leases, receivable:

March 31, 2005 December 31, 2004 Not later than 1 year 54.060.050 52.849.041 Later than 1 year and not later than 5 years 27.393.000 28.104.000 Minimum lease payments receivables, gross 81.453.050 80.953.041 Less: Unearned interest income (10.500.000) (10.644.000) Net investment in finance leases 70.953.050 70.309.041 Less: Reserve for impairment (2.156.000) (2.087.000) Minimum lease payments receivables, net 68.797.050 68.222.041

Net investment in finance leases may be analyzed as follows:

March 31, 2005 December 31, 2004 Not later than 1 year 43.889.050 42.738.041 Later than 1 year and not later than 5 years 24.908.000 25.484.000 68.797.050 68.222.041

As of March 31, 2005, the effective interest rates of minimum lease receivable denominated in foreign currency range between 19.26%-8.72% for USD and 21.69%-8% for EUR (December 31, 2004 - 19.4%-7.51% for USD and 21.69%-8% for EUR), respectively and effective interest rates of minimum lease receivable denominated in YTL range between 52.40%-22.29% (December 31, 2004 – 56.95%-22.58%). As of March 31, 2005, collaterals obtained by the Company from certain lease customers in relation to minimum lease payments receivables amounted to YTL 28,044,288 (in historical terms), USD 18,607,023 and EUR 5,268,162 (2004- YTL 28,285,000 in historical terms, USD 21,207,490 and EUR 5,062,581), which consist of mortgages, checks, letter of guarantees and liens on manufacturing equipments. Movements in the reserve for impairment:

March 31, 2005 December 31, 2004 Reserve at beginning of year 2.087.000 2.169.222 Provision for impairment 127.000 633.000 Recoveries (58.000) (451.000) Monetary gain - (264.222) Reserve at end of year 2.156.000 2.087.000

8.2 FINANCE LEASE LIABILITIES


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March 31, 2005 December 31, 2004 Current 3.369.043 3.502.057 Non-Current 5.709.775 6.199.584 9.078.818 9.701.641

As of March 31, 2004, the effective interest rates are 11.33%-4.5%. Future minimum lease payments for the above finance leases are as follows: March 31, 2005 December 31, 2004 Next 1 year 3.985.568 4.167.876 1 year through 5 years 6.238.622 6.838.722 Total minimum lease obligations 10.224.190 11.006.598 Net minimum obligations 10.224.190 11.006.598 Interest (-) (1.145.372) (1.304.957) Present value of minimum obligations 9.078.818 9.701.641 9. RELATED PARTY BALANCES AND TRANSACTIONS Balances with related parties 9.1 DUE FROM RELATED PARTIES

March 31, 2005 December 31, 2004 Kamil Yazıcı Yönetim ve Danışma A.Ş. 3.930.481 1.709.457 Anadolu Efes 1.404.957 2.590.796 Efes Pazarlama Ticaret A.Ş. (Efpa) 802.764 736.155 Tarbes Tarım Ürünleri ve Besicilik San.Tic.A.Ş. (Tarbes) 332.047 47.134 Anadolu Isuzu 912.438 1.023.781 Efes Holland Technical Management Consultancy 481.145 382.813 ZAO Moscow Efes Brewery (Efes Moskow) 2.565.249 1.574.415 CJSC Efes Karaganda Brewery (Efes Karaganda) 779.399 501.789 Efes Weifert Brewery (Efes Weifert) 433.370 - Others 1.087.650 153.997 12.729.500 8.720.337

As of March 31, 2005 and December 31, 2004, loans given to related parties, which are included in “Banking Loans” in the financial statements, are YTL 3,180,465 and YTL 820,000 respectively. 9.2 DUE TO RELATED PARTIES


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March 31, 2005 December 31, 2004 Anadolu Efes 37.061.199 35.907.886 Other 1.055.028 99.746 38.116.227 36.007.632

As of March 31, 2005 and December 31, 2004, related party deposits, which are included in “Banking Customer Deposits” in the financial statements, are YTL 94,851,274 and YTL 108,524,000 respectively. 9.3 TRANSACTIONS WITH RELATED PARTIES In the normal course of business, the Group undertakes arms-length basis transactions with its related parties consisting of:

March 31, 2005 March 31, 2004 Sales of goods and services, net Anadolu Efes 1.433.352 3.420.370 Efpa 1.678.108 1.422.267 Tarbes 23.117 658.037 Anadolu Isuzu 1.878.079 1.188.385 Efes Holland Technical Management Consultancy 458.277 - Efes Breweries International B.V. 23.234 - Efes Sınai Yatırım Holding A.Ş. (Efes Sınai) 52.811 - Anadolu Cetelem Tüketici Finansman A.Ş. (Anadolu Cetelem) 66.537 - Others 700.489 954.832 6.314.004 7.643.891

March 31, 2005 March 31, 2004 Purchases of Goods and Other Charges, net Anadolu Isuzu 1.911.975 48.163 Anelsan 100.083 - Efpa 4.418 151.896 Anadolu Cetelem - 54.135 Others 114.425 5.205 2.130.901 259.399

March 31, 2005 March 31, 2004

Interest and other financial income (included in banking revenues And banking foreign exchange losses) from Anadolu Efes - 3.553.749 Efpa 1.434 - Anadolu Cetelem 16.160 - Others - 108.344 17.594 3.662.093

9.3 TRANSACTIONS WITH RELATED PARTIES (continued)


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March 31, 2005 March 31, 2004 Interest and other financial expense (included in banking direct cost And banking foreign exchange losses) paid to Anadolu Efes 1.750.176 3.318.994 Anadolu Isuzu 526.128 669.607 Efpa 11.484 - Anadolu Eğitim ve Sosyal Yardım Vakfı 100.000 - Others 64.925 483.112 2.452.713 4.471.713

March 31, 2005 March 31, 2004 Interest and other financial expense (included in financial income / expense and foreign exchange losses) paid to

Anadolu Efes 2.500.994 333.335 Efes Sınai 33.101 - Others 81.978 26.216 2.616.073 359.551

March 31, 2005 March 31, 2004 Miscellaneous sales included in other income (including dividend received)

Anadolu Efes 76.643 - Polinas 4.398 - Coca Cola İçecek 7.810 1.783.266 Efpa 30.355 - Anadolu Isuzu 52.273 - Anadolu Eğitim ve Sosyal Yardım Vakfı 21.790 - Others 19.111 82.222 212.380 1.865.488

March 31, 2005 March 31, 2004 Interest and other financial income (included in financial income/expense and foreign exchange losses) received from

Anadolu Efes 1.434.068 2.207.599 Kamil Yazıcı Yönetim ve Danışma A.Ş. 161.054 5.523 Efes Sınai 18.760 77.617 Others 1.355 - 1.615.237 2.290.739

March 31, 2005 March 31, 2004 Purchases of fixed assets Anadolu Isuzu 284.317 -

9.3 TRANSACTIONS WITH RELATED PARTIES (continued)


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Intergroup loan purchase/sale: In the first half of 2004, AEH, one of the subsidiaries of the Company, signed Asset Sale Agreements with A-Bank, one of its subsidiaries, and in connection with these agreements AEH purchased loans in follow-up with a nominal value of YTL 27,527,928 that was carried at YTL 10,423,000, net of loan loss reserves, in the financial statements of A-Bank for a cash consideration of TL 14,301,363. As a result of this transaction, A-Bank has realized YTL 3,878,363 gain by reversing the loan loss reserves that was provided before, whereas AEH realized a TL 3,878,363 loss by providing impairment to these loans. Emoluments of the Board of Directors There are 3.487.915.756 shares (December 31,2004: 3.487.915.756) held by the members of Board of Directors. 10. OTHER RECEIVABLES AND PAYABLES 10.1 OTHER RECEIVABLES

March 31, 2005 December 31, 2004 Non-Banking 10.402.620 9.049.333 Banking 16.062.000 12.574.000 26.464.620 21.623.333

Non-Banking

March 31, 2005 December 31, 2004 Value Added Tax (VAT) to be transferred 2.546.300 650.835 Receivables From Loans Given (*) 7.856.320 7.605.379 Value Added Tax (VAT) deductible - 793.119 10.402.620 9.049.333

Banking

March 31, 2005 December 31, 2004 Assets held for resale, net 4.108.000 5.137.000 Receivable from brokerage customers 11.954.000 7.437.000 16.062.000 12.574.000

(*) In the first half of 2004, AEH, one of the subsidiaries of the Company, signed Asset Sale Agreements with ABank, one of its subsidiaries, and in connection with these agreements AEH purchased loans in follow-up with a nominal value of YTL 27.527.928 that was carried at YTL 10.423.000, net of loan loss reserves, in the financial statements of ABank for a cash consideration of TL 14.301.363. As a result of this transaction, A-Bank has realized YTL 3.878.363 gain by reversing the loan loss reserves that was provided before, whereas AEH realized a TL 3.878.363 loss by providing impairment to these loans.

11. BIOLOGICAL ASSETS None.


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12. INVENTORIES

March 31, 2005 December 31, 2004 Raw materials 14.310.828 10.571.486 Work-in-progress 6.056.626 6.130.475 Finished goods 11.582.858 12.588.379 Merchandise 28.491.464 26.618.589 Supplies and others 688.719 601.493 Advances given 17.414.609 8.504.128 78.545.104 65,014,550

13. RECEIVABLES AND DEFERRED INCOME FROM CONTINUING CONSTRUCTION CONTRACTS None. 14. DEFERRED TAX ASSETS AND LIABILITIES Deferred income tax Components of deferred tax assets and liabilities are as follows:


Deferred tax assets 36.247.220 37.801.309 Deferred tax liabilities (-) (2.439.995) (2.542.639)

Total deferred tax 33.807.225 35.258.670 Movements in deferred tax during the period are as follows:

Balance January 1, 2004

as reported Credited/ (charged) to income statement

Balance

March 31, 2005 Fixed Assets (financial leases included) 1.571.580 (17.971) 1.553.609 Inventory 33.648 (33.648) - Tax loss carryforward 54.236.436 - 54.236.436 Allowance for retirement pay liability 3.114.845 40.446 3.155.291 Other 17.638.837 (1.440.272) 16.198.565 Net deferred tax asset/(liability) 76.595.346 (1.451.445) 75.143.901 Allowance for deferred tax (41.336.676) - (41.336.676) Total 35.258.670 (1.451.445) 33.807.225 15. OTHER CURRENT / NON-CURRENT ASSETS AND LIABILITIES 15.1 OTHER CURRENT ASSETS


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Non-Banking

March 31, 2005 December 31, 2004 Prepaid taxes 1.247.026 1.233.184 Prepaid expenses 782.386 731.693 Other receivables and others 1.882.313 601.959 3.911.725 2.566.836

Banking

March 31, 2005 December 31, 2004 Transitory accounts and prepaid expenses 3.514.000 3.035.000 Prepaid taxes - 9.000 Other 1.594.000 1.149.000 5.108.000 4.193.000

15.2 OTHER NON-CURRENT ASSETS


15.3 OTHER CURRENT LIABILITIES


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Non-Banking

March 31, 2005 December 31, 2004 Taxes payable other than on income 5.727.347 4.643.817 Salaries and wages payable 398.213 593.399 Accrued expenses 343.809 718.220 Deferred income 501.022 - Other payables and liabilities 1.488.433 520.513 8.458.824 6.475.949

As of March 31,2005, other non-current liabilities are YTL 31,225. Banking


Payment orders 9.320.000 11.462.000 Taxes payable other than on income 2.662.000 4.137.000 Transitory accounts 178.000 - General provision (*) - 7.100.000 Others 17.717.000 17.165.000 29.877.000 38.864.000

(*) As of December 31, 2004, Group has provided a reserve amounting to YTL 7.100.000 related to future

unfavorable foreign exchange rate fluctuations between the rate used in translating the foreign currency indexed debt swap securities in to New Turkish Lira (the last 10 work days’ average of foreign exchange selling rates of the Central Bank) and the Group’s foreign exchange evaluation rate.

16. INVESTMENTS 16.1 INVESTMENTS


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Ownership

Interest (%) March 31,

2005 December 31,

2004 Coca Cola İçecek A.Ş. (Coca Cola İçecek) 15,1 44.626.697 44.626.697 Polinas Plastik Sanayi ve Ticaret A.Ş. (Polinas) 10,57 6.275.510 6.275.510 Doğu Yatırım Holding A.Ş. (Doğu Yatırım) 0,48 94.767 94.767 Efes Sınai Yatırım Holding A.Ş. (Efes Sınai) 18,2 31.339 31.339 Technology Leap Holding NU (Technology Leap) 18,1 3.268.803 3.268.803 Others 117.785 79.070 Impairment reserve for Technology Leap (3.268.803) (3.268.803) Available for sale investments- non-current 51.146.098 51.107.383

16.2 INVESTMENTS IN ASSOCIATES


Entity

Principle Activities

Country of

Business

Carrying Value

Ownership Interest Rate %

Group’s share of Income/

(Loss)

Carrying Value

Ownership Interest Rate

%

Group’s share of Income/ (Loss)

Anadolu Efes Biracılık ve Malt Sanayii A.Ş. (Anadolu Efes) (*)

Product. of beer

Turkey 436.597.451 35,09 6.050.724 427.829.927

35,09 88.630.742

Anadolu Cetelem Tüketici Finansman Anonim Şirketi (Anadolu Cetelem) (**)

Provides consumer finance services

Turkey 870.134 33,96 (908.350) 1.778.483

33,96 (4.153.293)

437.467.585 5.142.374 429.608.410 84.477.449

(*) Shares of Anadolu Efes are currently traded on the İstanbul Stock Exchange. (**) Anadolu Cetelem has a shareholders equity of YTL 1.739.870 (December 31, 2004 - YTL 3.556.569) as of March 31,

2005. 16.3 INVESTMENTS IN JOINT VENTURE The following is a list of the investments in joint venture : 2004 2003

Entity

Principle Activities

Country of

Business

Carrying Value

Ownership interest rate %

Group’s share of

income

Carrying Value

Ownership interest rate %

Group’s share of

income

Anadolu Isuzu Otomotiv Sanayi ve Ticaret A.Ş. (Anadolu Isuzu) (*)

Manufacturing oIsuzu brand commercial vehicles

Turkey 65.907.999 36,40 2.213.595 64.198.088 36,40 10.102.212

2.213.595 10.102.212 (*) Shares of Anadolu Isuzu are traded on the İstanbul Stock Exchange. 16.3 INVESTMENTS IN JOINT VENTURE (continued)


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The Group has a 36.4% interest in Anadolu Isuzu, which is involved in production of Isuzu commercial vehicles in Turkey. The Group’s share of the assets, liabilities, revenue and expenses of the joint venture, which are included in the consolidated financial statements, are as follows at March 31, 2005 and December 31, 2004:

March 31, 2005 December 31, 2004 Current assets 66.571.425 64.375.140 Non-current assets 34.391.349 35.753.280 100.962.774 100.128.420 Current liabilities 29.359.726 30.110.465Non-current liabilities 5.702.012 5.827.572 35.061.738 35.938.037 Revenue 28.631.456 118.728.794Cost of sales (22.694.898) (91.062.024)Selling and marketing expense (1.595.727) (8.400.010)Administrative expenses (1.440.535) (5.388.160)Finance cost (114.061) (121.186)Other income, net 565.907 1.242.292Income tax expenses (1.138.784) (4.327.266)Monetary gain/(loss) - (1.481.744)Extraordinary items - 911.516 Net profit 2.213.595 10.102.212

17. POSITIVE/NEGATIVE GOODWILL March 31, 2005 December 31, 2004 Cost 138.103.925 138.103.925 Accumulated Depreciation (102.759.669) (102.759.669) Net carrying amount 35.344.256 35.344.256 Starting from January 1, 2005 , th group has ceased amortizing th goodwill arising from business combinations before March 31, 2004, in accordance with IFRS 3. amortization of goodwill method is not applied for any acquisitions after March 31, 2004.


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18. INVESTMENT PROPERTY None (2004: None). 19. PROPERTY, PLANT AND EQUIPMENT For the third-month period ended March 31, 2005, additions and disposals of property,plant and equipment are as follows:

Additions Disposals- (net)

Land and Land Improvements - 70.920 Buildings 6.222 6.000 Machinery and equipment 716.819 300.423 Motor vehicles 1.784.450 30.712 Furnitures and fixtures 70.906 6.110 Other tangible assets 13.718 - Leasehold improvements 1.115.804 - Construction in progress 16.617 - 3.724.536 414.165

Equipment under finance lease The carrying value of property, plant and equipment under finance lease at March 31, 2005 is 25.606.645 YTL (December 31,2004: 25.603.988 YTL). Leased assets are pledged as securities for the related finance lease obligations. 20. INTANGIBLE ASSETS For the third-month period ended March 31, 2005, additions and disposals of intangible assets are as follows:

Additions Disposals- (net)

Rights 131.800 - Patents and Licences - - Other intangible assets 3.292 - 135.092 -

21. ADVANCES TAKEN


Advances Taken 3.253.884 1.013.664

22. PENSION PLANS None (2004: None).


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23. PROVISIONS Provision for retirement pay liability In accordance with existing social legislation, the Company and its subsidiaries incorporated in Turkey are required to make lump-sum payments to employees whose employment is terminated due to retirement or for reasons other than resignation or misconduct. Such payments are calculated on the basis of 30 days’ pay (limited to a maximum of YTL 1.648,90 at Marc 31, 2005 and YTL 1.574,74 at December 31, 2004 respectively ) per year of employment at the rate of pay applicable at the date of retirement or termination. For the companies established in Turkey, as of March 31, 2005 and December 31, 2004, the financial statements reflected a liability calculated using the Projected Unit Credit Method and based upon factors derived using their experience of personnel terminating their services and being eligible to receive retirement pay and discounted by using the current market yield at the balance sheet date on government bonds. The principal actuarial assumptions used at the balance sheet dates are as follows:


Discount rate %16 %16 Expected rates of salary/limit increases %10 %10

In addition, as of March 31, 2005 retirement pay liability provision was calculated by considering the increase of maximum liability of YTL 1.648,9 for the related year in accordance with inflation rate according to actuarial assumption. Retirement pay liability provision movement is as follows :

March 31, 2005 January 1, 2005 10.879.852 Interest cost 516.625 Actuarial loss - Charge for the year 744.434 Paid (194.196) March 31, 2005 11.946.755

December 31,

2004 January 1, 2004 10.771.176 Interest cost 1.521.279 Actuarial loss 114.460 Charge for the year 544.683 Paid (731.398) Monetary gain (1.340.308) December 31, 2004 10.879.892


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24. MINORITY INTEREST Minority interest is seperately classified in the financial statements. 25. ISSUED CAPITAL / ADJUSTMENTS OF INTERCOMPANY BALANCES

Marc 31, 2005 December 31, 2004 Common shares, YTL 0.001, par value authorized 20.475.019 (December 3 2004: 20.475.019)

93.157.173

93.157.173

As of March 31, 2005 and December 31, 2004 the Company’s historical subscribed and issued share capital was YTL 20.475.019 (historical terms).

March 31, 2005 December 31, 2004 Paid-in Capital

% Paid-in Capital %

Yazıcı Family 9.157.213 44,72 9.157.213 44,72 Kamil Yazıcı Yönetim ve Danışma A.Ş. 6.859.125 33,50 6.859.125 33,50 Publicly traded 4.458.681 21,78 4.458.681 21,78 Historical share capital 20.475.019 100,00 20.475.019 100,00 Restatement effect 72.682.154 72.682.154 Total restated share capital 93.157.173 93.157.173

Yazıcılar common shares are divided into four classes, each class of shares having identical voting rights on all matters except for the election of directors. Three of these classes of shares – Classes B, C and D – consist of registered shares and are owned by members of the Yazıcı Family. Class A shares are divided into two sub-classes, one consisting of registered and the other, bearer shares. Bearer shares are held by public and the other ones are held by Yazıcı Family. The following chart shows certain information with respect to the four classes of shares of Yazıcılar:

Class

Number of Authorized Shares

Percentage of Total

Capital Stock

Number of Directors Elected by Class

A 9.144.649.388 45 1 B 5.118.750.000 25 3 C 2.918.592.173 14 1 D 3.293.027.620 16 1 20.475.019.181 100 6


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26. CAPITAL RESERVES As of March 31, 2005, restated values of capital reserves which are included in equity and their restatement differences, are as follows:

Historic Amount Equity Restatement Differences

Restated Amount

Share Premium 26.326.920 (409.737) 25.917.183 27. PROFIT RESERVES Legal Reserves The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial Code (TCC). The first legal reserve is appropriated out of the statutory profits at the rate of 5%, until the total reserve reaches a maximum of 20% of the Company’s restated share capital. The second legal reserve is appropriated at the rate of 10% of all distributions in excess of 5% of the Company’s restated share capital. As required by the Capital Markets Board (CMB) Communiqué Serial XI, No : 25 “Communiqué for the Accounting Standards in Capital Markets”; beginning from the year 2003 profits, the net profit in the financial statements which are prepared in accordance with International Financial Reporting Standards will be taken as the base for dividend appropriation. Publicly held companies perform their dividend appropriation in accordance with CMB regulations as follows: Based on the CMB communiqué XI-25 part fifteen article 399, the amount included in "Prior Year Losses" account resulting from the first application of inflation accounting should be considered as a deduction during the identification of the profit to be distributed based on the inflation adjusted financial statements. Accordingly, the amount followed under “Prior Year Losses” account, may be offset against period income and retained earnings if exists, and the remaining losses against extraordinary reserves, legal reserves and reserves resulted from inflation adjustment of equity accounts, respectively. Regarding the profit resulting from 2004 operations resulted from the financial statements prepared in accordance with the Communiqué Serial: XI No: 25 or IFRS, dividend distribution of at least 30% (2003 - 20%) of the distributable profit is obligatory. Based on the General Assembly's decision of the Company, its subsidiaries, joint ventures and participations, this appropriation may be on cash basis or through the distribution of free shares not less than 30% of the distributable profit, or may be distributed both as cash and free shares. For the accounting period ending by December 31, 2004, all of the amount which will be calculated according to the regulations associated with the CMB’s minimum profit distribution necessity has to be provided from the distributable profit existing in the financial statements prepared according to Tax Law, over the net distributable profit calculated from the financial statements prepared according to the CMB communiqué XI-25. The explanation is based on CMB decision with the number of 7/242 and with the date of February 25, 2005. The statutory accumulated profits and statutory current year profit are available for distribution, subject to the reserve requirements referred to above.


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27. PROFIT RESERVES (continued) As of March 31, 2005, restated values of, legal reserves and extraordinary reserves, which are included in equity and their restatement differences, are as follows:

Historic Amount Equity Restatement Differences

Restated Amount

Legal Reserves 22.043.960 86.441.090 108.485.050 Statutory Reserves 8.000 63.000 71.000 Extraordinary Reserves 159.143.591 105.957.271 265.100.862 Special Reserves 1.153.827 3.000 1.156.827

28. ACCUMULATED PROFITS Accumulated profits are seperately classified in the financial statements. 29. FOREIGN CURRENCY POSITION Net foreign currency exposure for the Group (excluding banking) as of March 31, 2005 is approximately YTL105.519.861 (December 31, 2004: 87.815.719 YTL). 30. GOVERNMENT INCENTIVES AND GRANTS None. 31. COMMITMENTS AND CONTINGENCIES Non-Banking Letters of guarantee given to banks, supplies, and custom offices are YTL 12.253.236 (December 31, 2004: YTL 5.898.822 ). Letters of guarantee given to banks on the loans of associates and other related parties are YTL 34.714.160 (December 31, 2004: YTL 20.605.496). Letters of guarantee given to banks, supplies, and custom offices by the joint venture are YTL 7.130.028 (December 31, 2004: YTL 3.864.512) . Banking In the normal course of business activities, A-Bank and its consolidated subsidiaries undertake various commitments and incur certain contingent liabilities that are not presented in the financial statements including:

March 31, 2005 December 31, 2004 Letters of guarantees - issued by A-Bank 382.520.000 368.691.084 Letters of credit 121.535.000 123.981.464 Acceptance credits 10.322.000 4.855.000 Other 42.464.000 - Total non-cash loans 556.841.000 497.527.548 Other commitments 132.484.000 97.058.000 689.325.000 594.585.548


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31. COMMITMENTS AND CONTINGENCIES (continued) As of March 31, 2005, A-Lease obtained letters of guarantee amounting to YTL 3.231.020 (December 31, 2004: YTL 3.127.800) and submitted to various institutions for various leasing transactions and funds borrowed from banks. Trust Assets As of March 31, 2005, the nominal values of the YTL denominated assets held by the Group in fiduciary, agency or custodian capacities amounted to YTL 232.038.000 (December 31, 2004: YTL 217.749.000), and foreign currency denominated assets amounted to YTL 42.610.000 (December 31, 2004: YTL 39.966.000). Litigation There were a number of legal proceedings outstanding against the Group as of March 31, 2005 approximately YTL 956.000 (December 31, 2004: YTL 3.225.000). These mainly include matters relating to personal claims of customers and ex-employees of A-Bank. Although the outcome of these matters can not always be ascertained with precision, management, based on professional advice, and also considering A-bank’s insurance coverage believes that no material liabilities are likely to result. Consequently no provision has been made. Other A-Bank manages six open-ended investment funds which were established under the regulations of the Turkish Capital Board. In accordance with the funds’ charters, A-Bank purchases and sells marketable securities on behalf of funds, markets their participation certificates and provides other services in return for a management fee and undertakes management responsibility for their operations. 32. BUSINESS COMBINATIONS None.


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33. SEGMENTAL INFORMATION The Group’s operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The Group is organized into four major operating businesses. Segmental Information

(In thousands of YTL) Financial

Institutions Automotive &

Machinery Writing Instruments &

Stationery Other

Operations Unallocated Elimination Consolidated

Business Segments 31.03.2005 31.03.2004 31.03.2005 31.03.2004 31.03.2005 31.03.2004 31.03.2005 31.03.2004 31.03.2005 31.03.2004 31.03.2005 31.03.2004 31.03.2005 31.03.2004 Revenue from external customers 46.448 32.019 94.995 55.144 12.037 6.106 20.104 15.412 2.101 2.048 175.685 110.729 Inter-segment revenue 564 1.142 36 70 537 358 916 504 721 1.247 (2.774) (3.321) -

Total Revenue 47.012 33.161 95.031 55.213 12.574 6.465 21.020 15.916 2.823 3.295 (2.774) (3.321) 175.685 110.729 Segment Result 28.291 4.434 21.190 17.924 6.096 2.821 5.409 3.965 2.101 1.364 63.087 30.509 Operating Profit 7.490 (6.569) 10.196 10.783 2.876 (389) 1.095 327 (548) (1.540) 21.109 2.611 Net financial (expense) (769) (130) (3.037) (1.748) (1.554) (1.032) (1.038) (1.098) (3.064) (1.795) (9.462) (5.804) Other income/(expense) (2.162) 24.079 3.854 3.145 158 376 94 573 6.660 14.306 (6.985) 8.604 35.495 Income from associates and joint ventures

-

-

-

-

- -

- - 7.355 10.024

7.355

10.024 Income tax expense (1.607) (59) (2.711) (4.689) (420) 336 (108) (36) (576) (2.296) (5.422) (6.744) Minority interest (878) 113 133 - (250) - (71) - (4.094) - (10.162) (5.160) (10.049) Gain/(loss) on net monetary position - (4.467) - (1.423) - 472 - 857 - 11.425 9.481 - 16.345 Net profit for the year 2.073 12.967 8.435 6.067 810 (237) (28) 624 5.734 30.123 (7.667) 17.024 41.877 Total assets 1.247.823 1.227.054 147.529 135.882 46.137 52.367 40.447 33.845 1.111.316 1.309.869 (487.800) (795.951) 2.105.452 1.963.065 Segment liabilities 1.070.463 1.102.518 44.806 43.543 15.505 29.060 26.814 31.793 79.539 118.545 - (92.747) 1.237.127 1.232.713


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33. SEGMENTAL INFORMATION (continued) a) Substantially all of the consolidated revenues are obtained from operations located in Turkey. Similarly,

substantially all of the consolidated assets are located in Turkey . b) Investment in associates and joint ventures: Company’s effective participation rate for Anadolu Efes is

35.09%. The operations of Anadolu Efes and its subsidiaries consist of production, distribution and marketing of beer under a number of trademarks and bottling of soft drinks under Coca Cola trademark principally in Turkey, East Europe and Middle Asia. The result of these operations, as of March 31, 2005 and December 31, 2004 are reflected in “Income from associates and joint ventures” line of the consolidated income statement as YTL 6.050.724 and YTL8.068.730 respectively.

The geographic locations and the effective shareholding rates of Yazıcılar for the investments in Anadolu Efes are as follows:

Place of

Incorporatiın

Principal Activities

Effective Shareholding and Voting Rights %

31.03.2005

31.12.2004

Efes Breweries International N.V. (EBI) The Netherlands Facilitating investments in breweries 24,64 24,64 ZAO Moscow-Efes Brewery (Efes Moskow) Russia Production and distribution of beer 17,50 17,50 OAO Amstar (Amstar) Russia Production of beer 17,50 17,50 ZAO Efes Entertainment Russia Entertaintment 14,87 14,87 Efes Vitanta Moldova Brewery S.A. (Efes Vitanta)

Moldova Production and marketing of beer, softdrinks, low alcoholic drinks and mineral water

23,78

23,78

Efes Weifert Brewery d.o.o (Efes Weifert) Serbia Production and marketing of beer 15,49 15,49 Efes Zajecar d.o.o (Efes Zajecar) Serbia Office administration and marketing 15,87 15,87 Efes Commerce d.o.o Belgrade (Efes Commerce) Serbia Production and marketing of

beverages 24,64 24,64

CJSC Efes Karaganda Brewery (Efes Karaganda) Kazakhstan Production and marketing of beer 24,64 24,64 Efes Ukraine Brewery (Efes Ukraine) Ukraine Production and marketing of beer 14,52 14,52 Interbrew Efes Brewery S.A. (Interbrew Efes) Romania Production of beer 12,32 12,32 Efes Romania Industrie Si Comert S.A. (ERIC) Romania Distribution of beer 24,64 24,64 Efes Productie S.R.L (Efes Productie) Romania Distribution of beer 27,78 27,78 Efpa Turkey Marketing and distribution of beer 35,09 35,09 ATK Dış Ticaret Ltd Şti (ATK) Turkey Foreign Trade 35,09 - Tarbes Turkey Production of hops 35,00 35,00 Euro-Asian Brauereien Holding GMBH (Euro-Asian) Germany Investment company 24,64 24,64 Cypex Co. Ltd. (Cypex) Cyprus Marketing and distribution of beer 33,34 33,34 Tonus Open Joint Stock Company (Tonus) Kazakhstan Investment company 16,92 16,92 Anadolu Efes Technical and Management Consultancy N.V. (AETMC)

Netherlands Antilles

Consultancy 35,00 35,00

Efes Holland Technical Management Consultancy B.V. (EHTMC)

The Netherlands Consultancy 35,00 35,00

Efes Sınai Turkey

Facilitating investments in soft drinks in foreign countries.

18,20

18,20

Efes Invest Holland B.V (Efes Holland) The Netherlands Investment company of Efes Sınai 18,20 18,20 Azerbaijan Coca-Cola Bottlers LCC (Azerbaijan CC)

Azerbaijan Production, bottling, distribution and selling of soft drinks under Coca Cola trademark

16,37 16,37

J.V.Coca-Cola Almaty Bottlers Limited Liability Partnership ( Almaty CC)

Kazakhstan

Production, bottling, distribution and selling of soft drinks under Coca Cola trademark and distribution of Efes products

15,93

15,93

Coca-Cola Bishkek Bottlers C.J.S.C. (Bishkek CC) Kırgızistan

Production, bottling, distribution and selling of soft drinks under Coca Cola trademark and distribution of Efes products

16,38

16,38

Efes Sınai Dış Ticaret Ltd. Şti. (EST) Turkey Foreign Trade 18,02 18,02 Rostov Beverage C.J.S.C. (Rostov)

Russia Ceased production in 2000 and leased its plant to Efes Moskow.

18,20

18,20


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34. SUBSEQUENT EVENTS Distribution of dividends Disbursement of 22.750.021,31 YTL dividend to the shareholders in gross terms starting with May 31, 2005 from the profit of the period in year 2004 that takes place on the consolidated financial tables prepared in duly with UFRS was enacted in the planned general assembly meeting held on May 23, 2005. Disbursement of 15.000.000 YTL dividend to the shareholders in gross terms by cash, till the end of May 2005 was enacted on the ordinary general assembly meeting of Çelik Motor that held on April 11, 2005. Disbursement of 95.945.296 YTL dividend to the shareholders in gross terms starting with the date of May 30, 2005 was enacted in the ordinary general assembly meeting of Anadolu Efes that held on May 30, 2005. Increase in share capital On the board of directors assembly of the company held on March 14, 2005, the increase of share capital from YTL 20.475.019 from YTL 40.000.000 (historic) was decided. It was decided that the total of YTL 19.524.980 capital increase was covered from gain from sale of company shares YTL 15.751.609,46 and capital restatement difference YTL 3.773.371,36. The increase in capital was authorized on June 8, 2005. On the board of directors assembly of Çelik Motor held on April 6, 2005, the increase of share capital from YTL 10.500.000 to YTL 30.000.000 (historic) was decided. It was decided that the total of YTL 19.500.000 capital increase was covered from inflation restatement differences YTL 12.250.450,68, extraordinary reserves YTL 7.179.360,19, gain from sale of property YTL 70.173,33 and share premium in associates YTL 15,80. The increase in capital was authorized on May 6, 2005. Investments The purchase of 99,99% shares of McDonald’s Restaurantları Ltd. Şti. and Hamburger Restoran İşletmeleri A.Ş. was decided on the assembly of AEH Board of Directors held on May 4, 2005. Sale of Shares AEH, sold the 5% shares of Coca-Cola İçecek A.Ş., operating Coca Cola operations in Turkey, to Anadolu Efes on April 26, 2005 against YTL 51.623.692 . 35. DISCONTINUING OPERATIONS None. 36. OPERATING INCOME


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March 31, 2005 March 31, 2004 Non-banking 129.238.198 78.710.499 Banking – interest inome- net 28.291.575 4.433.952 157.529.773 83.144.451

37. OPERATING EXPENSES

March 31, 2005 March 31, 2004 Non-banking 21.166.458 19.453.595 Banking 20.813.000 8.444.204 41.979.458 27.897.799

Non-banking

March 31, 2005 March 31, 2004 General Administration expenses 12.628.036 13.500.442 Selling and marketing expenses 8.538.422 5.953.153 21.166.458 19.453.595

Banka

March 31, 2005 March 31, 2004 General Administration expenses 10.968.000 1.429.101 Foreign exchange loss, net 9.845.000 7.015.103 20.813.000 8.444.204


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38. OTHER OPERATING INCOME/EXPENSE AND GAIN/LOSS 38.1 OTHER OPERATING INCOME AND GAIN March 31, 2005 March 31, 2004

Interest income 3.115.961 3.208.764 Gain from valuation of marketable securities 486.684 3.446.581 Gain from sale of marketable securities - 871.146 Foreign exchange gain 2.606.866 6.666.216 Trading income 1.026.000 20.179.000 Transportation income 583.733 573.653 Gain on after sale service 598.429 414.729 Rent income 602.711 204.901

Other - 169.000 9.020.384 35.733.990 38.2 OTHER OPERATING EXPENSE AND LOSS

March 31, 2005 March 31, 2004 Loss from sale of marketable securities 28.637 - Other 387.646 239.049 416.283 239.049

39. FINANCIAL EXPENSES

March 31, 2005 March 31, 2004 Interest expense 6.066.209 5.629.520 Foreign exchange loss 2.980.772 - Other 415.944 174.297 Total financial expense, net 9.462.925 5.803.817

40. MONETARY GAIN/LOSS According to the CMB interpretation, the application of inflation accounting has been terminated starting from January 1, 2005 in Turkey. Therefore there is no monetary gain or loss recognised in the consolidated income statement for the three-month period ended March 31, 2005. (March 31, 2004: YTL 16.344.770)


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41. INCOME TAXES March 31, 2005 March 31, 2004 Current tax expense 3.970.040 5.135.233 Deferred tax expense 1.451.445 1.608.928 Total 5.421.485 6.744.161 The Group is subject to taxation in accordance with the tax procedures and the legislation effective in the countries in which the Group companies operate. Corporate tax rate is declared as 30% as of January 1, 2005. (2004: 33%). Corporate tax returns are required to be filed until the fifteenth of the fourth month following the balance sheet date and paid in one installment until the end of the fourth The tax legislation provides for a temporary tax of 30% (2004-33%) to be calculated and paid based on earnings generated for each quarter. The amounts thus calculated and paid are offset against the final corporate tax liability for the year. In 2003 and prior years, corporation tax was computed on the statutory income tax base without any adjustment for inflation accounting. Starting from January 1, 2004, taxable income will be derived from the financial statements which are adjusted for inflation accounting. Accumulated earnings arising from the first application of inflation accounting on December 31, 2003 balance sheet will not be subject to corporation tax, and similarly accumulated deficits arising from such application will not be deductible for tax purposes. Moreover, accumulated tax loss carry-forwards related with 2003 and prior periods will be utilized at their historical (nominal) values in 2004 and future years. Corporate tax losses can be carried forward for a maximum period of five years following the year in which the losses were incurred. The tax authorities can inspect tax returns and the related accounting records for a retrospective maximum period of five years. Effective from April 24, 2003, investment allowances provides a deduction from the corporate tax base of 40% of the purchase price of purchases of the brand-new fixed assets having economic useful life and exceeding YTL 10,000 (2004: YTL6,000) and directly related with the production of goods and services. Investment allowance that arose prior to April 24, 2003 are taxed at 19.8% (withholding tax) unless they are converted to new type at companies’ will. All investment allowances can be carried forward indefinitely. In Turkey, the tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax return. Therefore, provision for taxes, as reflected in the consolidated financial statements, has been calculated on a separate-entity basis. 42. EARNING PER SHARE Basic earnings per share (EPS) is calculated by dividing the net profit for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. In Turkey, companies can increase their share capital by making a pro rata distribution of shares (“Bonus Shares”) to existing shareholders without consideration for amounts resolved to be transferred to share capital from retained earnings and revaluation surplus. For the purpose of the EPS calculation such Bonus Share issues are regarded as stock dividends Dividend payments, which are immediately reinvested in the shares of the Company, are regarded similarly.Therefore, for the calculation of weighted average number of shares, it is assumed that the shares are in ciculation. Accordingly the weighted average number of shares used in EPS calculation is derived by giving retroactive effect to the issue of such shares with consideration.


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42. EARNING PER SHARE (continued) March 31, 2005 March 31, 2004Net profit attributable to ordinary shareholders for basic earnings per share

17.024.514 39.178.476

Interest on convertible redeemable preference shares - -Net profit attributable to ordinary shareholders for diluted earnings per share

17.024.514 39.178.476

March 31, 2005 March 31, 2004 Weighted average number of ordinary shares for basic earnings per share 20.475.019.181 13.650.012.787Share options - -Interest on convertible redeemable preference shares - - Adjusted weighted average number of ordinary shares for diluted earnings per share

20.475.019.181 13.650.012.787

There have been no other transactions involving ordinary shares or potential ordinary shares since the financial statements preparation date and before the completion of these financial statements. 43. CASH FLOW STATEMENT Cah flow statement is seperately represented in the complete set of financial statements.


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44. OTHER ISSSUES 44.1 RESERVE DEPOSITS AT CENTRAL BANK

March 31, 2005 December 31,2004 Reserve Deposits - New Turkish Lira 7.865.000 8.107.000 - Foreign Currency 44.666.000 44.644.000 52.531.000 52.751.000

According to the regulations of the Central Bank, banks are obliged to reserve a portion of certain liability accounts as specified in the related decree. Such reserves are deposited with the Central Bank. As of March 31, 2005 and December 31, 2004, reserve deposit rates applicable for new Turkish lira deposits were 6% and 11% for foreign currency deposits. As of March 31, 2005, the interest rates applied for new Turkish lira and foreign currency reserve deposits are 11.8% and 1.2 % (2004 – 12.5% and 1.04%), respectively. 44.2 BANKING LOANS

March 31, 2005 Amount Effective interest rate New

Turkish Lira

Foreign Currency

Foreign Currency Indexed

Total

New Turkish

Lira

Foreign

Currency


Corporate loans 355.619.630 164.139.200 67.219.000 586.977.830 %23 %7 %8 Consumer loans 3.806.000 - - 3.806.000 %36 - - Total performing loans 359.425.630 164.139.200 67.219.000 590.783.830 Restructured 3.120.000 695.000 19.409.000 23.224.000 Loans in arrears 33.075.000 - - 33.075.000 Less: Reserve for possible loan losses

(25.437.000) - - (25.437.000)

Total 370.183.630 164.834.200 86.628.000 621.645.830

December 31,2004 Amount Effective interest rate New

Turkish Lira

Foreign Currency


Total

New

Turkish Lira

Foreign

Currency


Corporate loans 318.936.000 157.473.000 61.699.000 538.108.000 %27,64 %7,11 %7,93 Consumer loans 4.642.000 - - 4.642.000 %35,88 - - Total performing loans 323.578.000 157.473.000 61.699.000 542.750.000 Restructured 5.805.000 1.223.000 13.599.000 20.627.000 Loans in arrears 29.730.000 - - 29.730.000 Less: Reserve for possible loan losses

(22.114.000) - - (22.114.000)

Total 336.999.000 158.696.000 75.298.000 570.993.000


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44.2 BANKING LOANS (continued) Movements in the reserve for possible loan losses:

March 31, 2005 December 31,2004

Reserve at beginning of year 22.114.000 44.833.699

Provision for possible loan losses 3.522.000 8.237.000 Recoveries (189.000) (7.283.000) Provision net of recoveries 3.333.000 954.000

Loans written off and sold during the year (10.000) (18.223.000) Monetary gain - (5.450.699)

Reserve at the end of year 25.437.000 22.114.000

A-Bank classified separately loans that have been restructured through medium to long-term agreements signed by related borrowers. As of March 31, 2005, A-Bank provided an estimated allowance for impairment on YTL 7.273.000 (2004 – YTL 6.023.000) of such loans amounting to YTL 5.164.000 (December 31, 2004 – YTL 4.330.000) as included in reserve for possible loan losses. As of March 31, 2005 interest accrued on the restructured loans amounted to YTL 3.338.000 (December 31, 2004: YTL 1.180.000). Reserve for impairment also includes YTL 3.690.000 (December 31, 2004 – YTL 3.403.000) provided on a portfolio basis as of March 31, 2005. As of March 31, 2005, loans and advances on which interest is not being accrued or where interest is suspended, amounted to YTL 33.075.000 (December 31, 2004 – YTL 29.730.000). 44.3 BANKING CUSTOMER DEPOSITS Deposits from other banks

March 31, 2005 December 31,2004 Amount Effective interest rate Amount Effective interest rate New

Turkish Lira Foreign currency

New Turkish

Lira

Foreign currency

New Turkish Lira

Foreign currency

New Turkish Lira

Foreign currency

Demand 28.000 5.285.000 - - 11.000 3.112.000 - - Time 8.005.000 31.526.000 %16,48 %3 - - - Total 8.033.000 36.811.000 11.000 3.112.000


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44.3 BANKING CUSTOMER DEPOSITS (continued) Other money market deposits

March 31, 2005 December 31,2004 Amount Effective interest rate Amount Effective interest rate New

Turkish Lira

Foreign currency

New Turkish

Lira

Foreign currency

New Turkish Lira

Foreign currency

New Turkish

Lira

Foreign currency

Saving Demand 5.532.000 30.039.000 - - 5.482.000 30.140.000 - - Time 92.352.000 217.377.000 %18,8 %3,82 89.781.000 224.148.000 %21,21 %4,01 97.884.000 247.416.000 95.263.000 254.288.000 Commercial and other Demand 33.351.213 15.823.000 25.911.355 48.732.281 - - Time 99.480.000 66.032.000 97.904.690 52.095.716 %17,96 %2,97 132.831.213 81.855.000 123.816.045 100.827.997 Total 230.715.213 329.271.000 219.079.045 355.115.997

Other money market deposits

March 31, 2005 December 31,2004 Amount Effective interest rate Amount Effective interest rate

New Turkish Lira

Foreign currency

New Turkish

Lira

Foreign currency

New Turkish Lira

Foreign currency

New Turkish

Lira

Foreign Currency

Obligations under repurchase

agreements: -Due to customers 7.443.000 - %11,59 - 3.658.000 - %13,77 - -Due to banks 103.114.000 - %12,05 - 111.975.000 - %14,05 - 110.557.000 - 115.633.000 - Interbank deposits 5.035.000 - %15,1 - 19.634.000 - %17,78 - Other money market

deposits - - 1.408.000 - %18,51 - Total 115.592.000 - 136.675.000 -

44.4 FUNDS BORROWED

March 31, 2005 December 31,2004 Amount Effective interest rate Amount Effective interest rate

New Turkish

Lira

Foreign currency

New Turkish

Lira

Foreign currency

New Turkish

Lira

Foreign currency

New Turkish Lira

Foreign Currency

Short-term Fixed interest 26.528.000 221.711.800 %16,64 %3,68 - %7,5 30.190.000 210.295.558 %18,76 %3,67-%7,50Floating interest - 10.222.319 %5,19- %6,91 - 16.496.927 - %4,38-%6,50Medium-long term Fixed interest - - - - - - Floating interest - 22.253.612 %4,12-%5,28 - 14.222.872 - %2,18-%4,65 Total 26.528.000 254.187.732 30.190.000 241.015.357 Total funds borrowed 280.715.732 271.205.357


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44.4 FUNDS BORROWED (continued) Repayments of medium-long-term borrowing as per original contractual terms are as follows:

March 31, 2005 December 31,2004

Fixed rate

Floating rate

Fixed rate

Floating rate

2005 - 697.000 - 602.000 2006 - 21.556.000 - 13.620.872 - 22.253.000 - 14.222.872

Letters of guarantee denominated in foreign currency, YTL equivalent of which amounts to YTL 6.443.666 (December 31, 2004-YTL 6.462.000) were given to the lending institutions as collateral against the loans obtained. As of March 31, 2005 EUR 1.767.277 (December 31, 2004: 1.743.142 EUR) of the short-term foreign currency borrowing equivalent of YTL 3.138.154 (December 31, 2004-YTL 3.184.000) is borrowed by issuing promissory note to the related bank.


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44.5 DERIVATIVES In the ordinary course of business, the Group enters into various types of transactions that involve derivative financial instruments. A derivative financial instrument is a financial contract between two parties where payments are dependent upon movements in price in one or more underlying financial instruments, reference rates or indices. Derivative financial instruments include forwards, swaps and futures. The table below shows the favorable (assets) and unfavorable (liabilities) fair values of derivative financial instruments together with the notional amounts analyzed by the term to maturity. The notional amount is the amount of a derivative’s underlying asset, reference rate or index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding at year-end and are neither indicative of the market risk nor credit risk. The fair value of derivative financial instruments is calculated by using forward exchange rates at the balance sheet date. In the absence of reliable forward rate estimations in a volatile market, current market rate is considered to be the best estimate of the present value of the forward exchange rates. March 31, 2005

Fair value assets

Fair value

liabilities

Notional amount in

New Turkish Lira equivalent

Up to 1 month

1 to 3 months

3 to 6 months

6 to 12 months

1 to 5 years

More than 5 years

Derivatives held for trading Forward purchase contract 460.000 1.045.000 62.559.000 31.132.000 6.818.000 20.445.000 4.164.000 - - Forward sale contract 445.000 47.000 63.910.000 31.760.000 6.993.000 20.512.000 4.645.000 - - Currency swap purchase 59.000 68.000 154.676.000 127.265.000 - - 27.411.000 - - Currency swap sale - 1.037.000 159.648.000 127.273.000 - - 32.375.000 - - Futures purchase 12.000 35.000 3.033.000 - 3.033.000 - - - - Futures sale - - 3.058.000 - 3.058.000 - - - - Option purchase - 5.000 685.000 685.000 - - Option sale - - - - - - Derivatives held for trading - - 7.273.000 6.043.000 1.230.000 - - - - Forward purchase contract - - 7.298.000 6.063.000 1.235.000 - - - - Total 976.000 2.237.000 462.140.000 330.221.000 22.367.000 40.957.000 68.595.000 - -

December 31,2004

Fair value assets

Fair value

liabilities

Notional amount in

New Turkish Lira equivalent

Up to 1 month

1 to 3 months

3 to 6 months

6 to 12 months

1 to 5 years

More than 5 years

Derivatives held for trading Forward purchase contract 939.000 833.000 33.335.000 373.000 8.895.000 6.915.000 17.152.000 - - Forward sale contract - - 33.221.000 376.000 8.840.000 6.906.000 17.099.000 - - Currency swap purchase 54.000 1.030.000 139.861.000 113.690.000 - - 26.171.000 - - Currency swap sale - - 146.087.000 113.712.000 - - 32.375.000 - - Futures purchase 13.000 15.000 5.318.000 - 5.318.000 - - - - Futures sale - - 5.376.000 - 5.376.000 - - - - Option purchase - - 1.919.000 1.919.000 - - - - - Option sale - - 2.106.000 2.106.000 - - - - - Total 1.006.000 1.878.000 367.223.000 232.176.000 28.429.000 13.821.000 92.797.000 - -


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44.6 FINANCIAL INSTRUMENTS Banking Financial Risk Management General To maintain and improve the soundness of its operations, A-Bank accords top management priority to upgrading its risk management systems and capabilities. According to A-Bank’s “Risk Management Policy”, Financial Risks are composed of Market, Credit and Liquidity risks. These risks are supervised by the “Bank Risk Committee” while the various Risk Committees and Risk Control Unit carry out the risk management related tasks. Risk Management Policy includes details about the framework for defining, measuring, monitoring and managing the risks taken by the business units across A-Bank. Risk Management Policy covers, Sound and optimum capital allocation Quantification of the actual risks Establishment of dynamic risk limits

Building a capital management system lies at the core of A-Bank’s Risk Management Policy. In addition to fully complying with regulatory capital requirements, A-Bank has its own estimate of required economic capital. This figure is believed to reflect a more realistic picture of A-Bank’s risk profile. Based on the capital management tool, A-Bank conducts RaRoC (Risk-adjusted Return on Capital) analysis for different lines of business and uses the outcome as a performance measurement tool. In order to obtain an accurate grasp of the A-Bank’s exposures, A-Bank quantifies the actual risks using its own in-house models. As a last step of Risk Management Policy, A-Bank determines risk-based limits, with respect to available economic capital and monitors actual risks against these limits. Credit Risk Seeking to maintain a sound asset portfolio and prevent non-performing loans, the A-Bank has clearly seperated its sales-related departments and credit management department. A-Bank has its own score-sheet and rating scale and uses the output of this internal rating tool in managing the credit portfolio, setting limits, pricing and collateralizing.


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44.6 FINANCIAL INSTRUMENTS (continued) Sectoral break down of cash and non-cash loans is as follows:

March 31, 2005 December 31,2004 Cash Non-cash Cash Non-cash Automotive 8.076.889 14.082.213 4.720.000 8.131.000 Chemical 18.055.042 12.733.201 20.151.000 12.116.000 Construction 47.871.764 80.392.100 38.303.000 77.950.000 Electrics and electronics 4.946.266 9.397.227 5.090.000 4.470.000 Finance 53.924.147 36.203.431 42.469.000 30.888.000 Food and beverage 41.308.624 30.791.859 39.615.000 28.196.000 Forest products and agriculture 15.819.075 4.099.914 14.066.000 2.692.000 Iron and steel, non-metal 37.011.506 37.737.828 32.116.000 41.051.000 Machinery 22.045.483 12.998.443 29.200.000 12.170.000 Mining 18.425.080 16.971.473 8.511.000 18.071.000 Paper 7.587.422 14.607.628 7.698.000 15.000.000 Petroleum 3.917.547 6.859.557 5.112.000 9.037.000 Production 36.330.333 22.060.798 35.570.000 19.884.000 Textile 110.069.540 47.413.588 111.952.000 46.352.000 Tourism 18.610.260 1.308.445 14.112.000 1.808.000 Trade 83.191.621 103.902.646 68.048.000 98.512.000 Transportation 15.772.913 12.615.270 14.689.000 15.725.000 Others 57.559.555 41.069.215 59.146.000 55.475.000 Corporate loans 600.523.066 505.244.837 550.568.000 497.528.000 Consumer loans 3.750.468 - 4.642.000 - Interest accruals 9.734.154 - 8.167.000 - Loans in arrears 33.074.902 - 29.730.000 - Provision for possible loan losses

(25.437.059) - (22.114.000) -

Total 621.645.531 505.244.837 570.993.000 497.528.000


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44.6 FINANCIAL INSTRUMENTS (continued) Liquidity Risk Liquidity risk refers to the possibility of an institution being unable to access necessary funds due to declining fund-raising capacity. The Group closely monitors its overall liquidity level and operates under strict limits based on stress conditions. To address liquidity risk, Group has adopted a unified approach to YTL and foreign currency fund-raising opportunities. The table below analyses assets and liabilities (in thousands of YTL) of Group into relevant maturity groupings based on the remaining period at balance sheet date to contractual maturity date.

(Thousands YTL) Up to

1 month 1 to 3

months 3 to 6

months 6 to 12 months

Over 1 year

Total

As at March 31, 2005 Assets Cash and balances with the Central Bank

11.817 - - - - 11.817

Deposits with banks and other financial

87.002 1.537 - - - 88.539

Other money market placements 21.032 - - - - 21.032 Reserve deposits at the Central Bank 52.531 - - - - 52.531 Trading securities 11.732 971 1.731 37.025 4.787 56.246 Investment securities 77 6.944 1.482 8.617 236.657 253.777 Originated loans and advances 379.034 68.179 61.155 50.376 62.902 621.646 Minimum lease payments receivable 6.437 7.621 11.326 18.506 24.908 68.798 Derivative financial instruments 206 209 498 63 - 976 Assets held for resale - - - - 4.108 4.108 Tangible assets - - - - 4.389 4.389 Intangible assets - - - - 3.103 3.103 Deferred tax assets - - - - 35.251 35.251 Other assets 12.683 372 - - 12.689 25.744 Total assets 582.551 85.833 76.192 114.587 388.793 1.247.956 Liabilities Deposits from other banks 44.844 - - - - 44.844 Customers’ deposits 462.680 72.547 11.951 12.117 693 559.987 Other money market deposits 115.592 - - - - 115.592 Funds borrowed 70.844 34.530 56.962 97.636 20.745 280.717 Derivative financial instruments 1.154 5 10 1.068 - 2.237 Other liabilities and provisions (*) 58.796 196 90 698 6.317 66.097 Income taxes payable 1.352 211 - - - 1.563 Total liabilities 755.262 107.488 69.013 111.519 27.755 1.071.037 Net liquidity gap (172.711) (21.655) 7.179 3.068 361.038 176.919 As at December 31, 2004 Total assets 585.618 74.405 70.338 126.600 364.456 1.221.417 Total liabilities 728.632 140.276 54.096 108.154 18.097 1.049.255 Net liquidity gap (143.014) (65.871) 16.242 18.446 346.359 172.162

(*) Includes blocked accounts


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44.6 FINANCIAL INSTRUMENTS (continued) Market Risk Market risk is defined as the decrease in the market value of ABank due to relevant price fluctuations. This risk group is handled in two broad categories. Trading and Structural Interest Rate Risk, which requires different models and assumptions. Trading Risk refers to the daily volatility of values of tradeable assets, such as Foreign Exchange, Fixed Income Securities, Stocks, and related derivative instruments. Value-at-Risk (VaR) is the primary tool for day-to-day monitoring of trading-related market risk. VaR is a statistical measure of the potential losses that could occur due to movements in market rates and prices under normal market circumstances. Secondly, Structural Interest Rate Risk, addresses the risk which stems from sensitivity of the relatively illiquid items of the balance sheet to the shifts of the yield curve. Market risk exposure of ABank as a whole is bound by the economic capital allocated by the Board. Currency Risk A-Bank centralized its currency risk and assigned Treasury Department to manage this risk. In principal, the balance sheet is assumed to be currency risk free. Any residual currency risk is treated as trading risk and it is subject to Value-at-Risk limits and nominal limits set by the Board. As of March 31, 2005 the ABank’s on balance sheet foreign currency short position is YTL 62.316.000 (December 31, 2004 -YTL 35.629.000 - short position).


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44.6 FINANCIAL INSTRUMENTS (continued) The concentrations of assets, liabilities and off balance sheet items of Group: (Thousands YTL)

New Turkish Lira

US Dollars

EUR

Japanese Yen

Others

Total

As at March 31, 2005 Assets Cash and balances with the Central Bank 4.134 4.687 2.781 46 169 11.817 Deposits with banks and other financial institutions 64.686 22.270 1.119 136 328 88.539 Other money market placements 4.566 16.466 - - - 21.032 Reserve deposits at the Central Bank 7.865 44.666 - - - 52.531 Trading securities 56.198 48 - - - 56.246 Investment securities 29.140 224.634 3 - - 253.777 Originated loans and advances 370.184 191.100 60.357 - 5 621.646 Minimum lease payments receivable 11.851 30.373 26.574 - - 68.798 Derivative financial instruments 976 - - - - 976 Tangible assets held for resale 4.108 - - - - 4.108 Tangible assets 4.389 - - - - 4.389 Intangible assets 3.103 - - - - 3.103 Deferred tax assets 35.251 - - - - 35.251 Other assets 20.243 3.538 1.963 - - 25.744 Total assets 616.693 537.782 92.797 182 502 1.247.956 Liabilities Deposits from other banks 8.033 32.387 4416 - 8 44.844 Customers’ deposits 216.443 251.923 85.959 4.584 1.078 559.987 Other money market deposits 115.592 - - - - 115.592 Funds borrowed 26.505 187.704 66.508 - - 280.717 Derivative financial instruments 2.237 - - - - 2.237 Other liabilities and provisions (*) 33.144 25.293 7.218 - 442 66.097 Income taxes payable 1.563 - - - - 1.563 Total liabilities 403.517 497.307 164.101 4.584 1.528 1.071.037 Net on-balance sheet position 213.176 40.475 (71.304) (4.402) (1.026) 176.919 Off-balance sheet position Net notional amount of derivatives (49.491) (39.212) 83.453 4.428 1.075 253 Non- cash loans 246.387 173.708 83.174 9.988 1.119 514.376 As at December 31, 2004 Total assets 609.355 523.820 87.672 171 399 1.221.417 Total liabilities 431.643 479.182 134.214 3.181 1.035 1.049.255 Net on balance sheet position 177.712 44.638 (46.542) (3.010) (636) 172.162 Off –balance sheet position, net nominal amount 194.646 170.074 119.143 14.149 2.139 500.151 (*) Includes blocked accounts


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44.6 FINANCIAL INSTRUMENTS (continued) Interest Rate Risk The net present value assets and liabilities are driven by interest rates different in terms of maturity and market characteristics. Trading securities are sensitive to treasury bill rates; therefore they are treated in the trading book and subject to Value-at-Risk limits. Items such as loans, deposits and other interest rate sensitive assets and liabilities are assumed to be sensitive to the structural changes in the interest rates and thus classified in the banking book. The relevant risk is measured with simulation based interest rate models. Applied limits on the risks posed by the asset- liability mismatches are derived from the capital set aside by the Board for Asset- Liability Management purposes. The table below summarizes Group’s exposure to interest rate risk (in thousands of YTL) on the basis of the remaining period at the balance sheet date to the re-pricing date. Up to 1

month 1 to 3

months 3 to 6


1 to 5 years

Over 5 years

Non interest bearing

As at March 31, 2005 Assets: Cash and balances with the Central Bank

293 - - - - 11.524 11.817

Deposits with banks and other financial institutions

81.437 1.537 - - - 5.565 88.539

Other money market placements 21.032 - - - - - 21.032Reserve deposits at the Central Bank 52.531 - - - - - 52.531Trading securities 277 971 1.731 36.970 4.702 11.595 56.246Investment securities 77 6.944 1.482 8.617 236.657 - 253.777Originated loans and advances 385.415 69.926 59.066 49.305 47.501 10.433 621.646Minimum lease payments receivable 5.496 7.113 11.326 18.506 24.908 1.449 68.798Derivative financial instruments 403 124 449 - - - 976 Tangible assets held for resale - - - - - 4.108 4.108Tangible assets - - - - (26) 4.415 4.389Intangible assets - - - - - 3.103 3.103Other assets 11.116 (372) - - - 50.250 60.995 Total assets 558.077 86.243 74.054 113.398 313.742 102.443 1.247.956 Liabilities: Deposits from other banks 39.531 - - - - 5.313 44.844Customers’ deposits 362.538 72.130 11.951 12.117 693 100.559 559.987Other money market deposits 115.592 - - - - - 115.592Funds borrowed 82.076 50.684 59.572 88.385 - - 280.717Derivative financial instruments 1.154 5 10 1.068 - - 2.237Other liabilities and provisions (*) 54.656 196 90 140 5.018 5.997 66.097Income taxes payable - - - - - 1.563 1.563 Total liabilities 655.547 123.015 71.623 101.710 5.711 113.432 1.071.037 On balance sheet interest sensitivity gap (97.470) (36.772) 2.431 11.688 308.031 (10.989) 176.919Off balance sheet interest sensitivity gap (1.339) (205) (67) (5.444) - - (7.055) Total interest sensitivity gap (98.809) (36.977) 2.364 6.244 308.031 (10.989) 169.864 (*) Includes blocked accounts


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44.6 FINANCIAL INSTRUMENTS (continued) The table below summarizes Group’s exposure to interest rate risk (in thousands of YTL) on the basis of the remaining period at the balance sheet date to the repricing date. Up to 1

Month 1 to 3

months 3 to 6


1 to 5 years

Non interest bearing

Total

As at December 31, 2004 Assets: Cash and balances with the Central Bank

4,562 - - - - 9,674 14,236

Deposits with banks and other financial institutions

138,208 - - - - 5,047 143,255

Other money market placements 19,846 - - - - - 19,846 Reserve deposits at the Central Bank 52,751 - - - - - 52,751 Trading securities 193 322 1,141 45,095 8,362 11,289 66,402 Investment securities - - 219,867 - - - 219,867 Originated loans and advances 338,577 69,642 50,973 53,354 48,687 9,760 570,993 Minimum lease payments receivable 4,963 7,635 10,331 18,645 25,484 1,164 68,222 Derivative financial instruments - - - - - 1,006 1,006 Tangible assets - - - - - 5,025 5,025 Intangible assets - - - - - 3,793 3,793 Other assets 7,083 - - - - 48,938 56,021 Total assets 566,183 77,599 282,312 117,094 82,533 95,696 1,221,417 Liabilities Deposits from other banks - - - - - 3,123 3,123 Customers’ deposits 357,594 87,035 3,601 10,645 799 114,521 574,195 Other money market deposits 136,675 - - - - - 136,675 Funds borrowed 79,507 57,093 52,464 82,141 - - 271,205 Accounts Payable - - - - - 1,878 1,878 Derivative financial instruments 1,585 45 69 139 123 58,790 60,751 Other liabilities and provisions (*) - - - - - 1,343 1,343 Income taxes payable - - - - - 85 85 Deferred tax liability Total liabilities 575,361 144,173 56,134 92,925 922 179,740 1,049,255 On balance sheet interest sensitivity gap

1,089 (60,305) 231,247 8,779 56,127 - 236,937

Off balance sheet interest sensitivity gap

(215) - 11 - - - (204)

Total interest sensitivity gap 874 (60,305) 231,258 8,779 56,127 - 236,733 (*) Includes blocked account


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44.6 FINANCIAL INSTRUMENTS (continued) Operational Risk Operational risk is defined as the risk of direct or indirect loss resulting from inadequate or failed internal process, people and systems or from external events. Operational risk which is inherent in all business activities is associated with human error, system failure and inadequate controls and procedures. Operational risk includes errors and omissions in business activities, internal and external fraud and natural disasters. Group has Risk Management and Internal Control practices, to keep operational risks under control and minimize it by operating under detailed written procedures. All documents, including Risk Management policies and contingency procedures, are kept up-to-date and accessible to all staff in electronic media. Capital Adequacy To monitor the adequacy of its capital, A-Bank uses ratios established by BRSA. These ratios measure capital adequacy (minimum 8% as required by BRSA) by comparing A-Bank’s eligible capital with its balance sheet assets, off-balance sheet commitments and market and other risk positions at weighted amounts to reflect their relative risk. As of March 31, 2005 A-Bank’s capital adequacy ratio calculated on consolidated basis based on statutory financial statements is 17.68% (December 31, 2004: 19,21%). Non-Banking Financial risk management objectives and policies The Group’s principal financial instruments, other than derivatives, comprise bank borrowings, finance leases, cash and short-term deposits and marketable securities. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations. The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency risk, and credit risk. The board / management reviews and agrees policies for managing each of these risks and they are summarized below. The Group also monitors the market price risk arising from all financial instruments. 1) Foreign currency risk The Group’s operations are predominantly performed in Turkey where the economy experiences high and variable levels of inflation. The following table summarizes the exchange rate of New Turkish lira to 1 USD and 1 EUR :

Exchange rate at January 1, 2005

Average exchange rate in the period

Exchange rate at March 31, 2005

YTL /USD Türkiye 1.3363 1.3205 1.3706 YTL /EUR Türkiye 1.8233 1.7335 1.7757


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44.6 FINANCIAL INSTRUMENTS (continued) The Group does not hedge investments, receivables, accounts payables, lease obligations and borrowings denominated in a foreign currency. The Group does not hedge their estimated foreign currency exposure in respect of sales and purchases. 2) Liquidity Risk Liquidity risk arises from the possibility that customers may not be able to settle within the normal terms of trade. To manage this risk the Group periodically assesses the financial viability of customers. Liquidity risk arises from the possibility that a market for derivatives may not exist in some circumstances. 3) Credit Risk The Group is generally raising funds by liquidating their short-term financial instruments such as collecting their receivables. The Group’s proceedings from these instruments generally approximate their fair values. The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group’s management based on prior experience and the current economic environment. 4) Price Risk The Group is exposed to exchange rate fluctuations due to the nature of their businesses. The Group’s imports are in US Dollars and European currencies. These currencies strengthening against the subsidiaries’ local currencies have an adverse effect on the Group’s results. Certain parts of the interest rates related to borrowings are based on market interest rates; therefore the Group is exposed to interest rate fluctuations on domestic and international markets. The Group does not have any hedging transactions to limit currency and interest rate risks. 5) Interest Rate Risk The Group mainly enters into fixed based contracts in its financial borrowings. As of March 31, 2005, overwhelming majority of the Group’s (non-banking) long-term debt was at fixed rates. The effective interest rate range which are calculated from different types of currencies other than New Turkish Lira, is as follows: Fixed rate bank loans 1.38%-5.8 % Fixed leasing 4.5%-11.33% As of March 31, 2005 the effective interest range of ABanks’ credit loans is as follows: Short term foreign exchange denominated; Fixed rate loans %3,68-%7,5 Variable rate loans %5,19-%6,91 Long term foreign exchange denominated; Variable rate loans %4,12-%5,28 44.6 FINANCIAL INSTRUMENTS (continued)


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Fair Values Fair value of trade receivables, other current assets, trade payables and other current liabilities are equal to their carrying values in the balance sheet due to their short term nature. Due to the unavailability of market prices and insufficiency of other methods to be used in determining the fair value, investments are carried on their cost values. Short term and long term financial lease liabilities, and other current liabilities are presented with their carrying values in the balance sheet owing to their foreign exchange denominated structure and revalued by the year end foreign exchange rates. Its accepted that, banking loans are all deemed to represent their carrying values because of the fact that, lender updates the interest rate applied on loans aiming to reflect the active market rates.

Yazıcılar Holding Anonim Şirketi and Its Subsidiaries

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